Kohl’s receives preliminary buyout offers from several parties
Category: #retail  By Pankaj Singh  Date: 2022-03-22
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Kohl’s receives preliminary buyout offers from several parties

American department store retailer Kohl’s has reportedly confirmed that it has received several preliminary buyout offers from parties interested in taking over the retail chain.

The chain stated that the propositions are non-binding and without dedicated financing. The board of directors of the company hired Goldman Sachs bankers to coordinate with bidders.

Sources with knowledge of the matter have claimed that one of the bidders is HBC-owned Hudson’s Bay Co., a department store operator based in Canada. Private equity firm Sycamore also planned to place a bid recently, which would value the firm at over USD 9 billion.

The latest increase in interest comes after Kohl’s statement that an offer placed by Starboard-backed Acacia Research was too low at USD 64 per share. Since then, Kohl’s has forged ahead with its plans to increase profits and acquire new customers.

Earlier this month, the brand published the latest long-term financial objectives for its business. This includes surging annual sales by a low single-digit percentage.

Despite strong overall consumer spending after the pandemic, the sales of Kohl’s were lower than before the outbreak. As the company’s share price lagged in comparison to other blockbuster retailers, activists like hedge fund Macellum Advisors placed immense pressure on Kohl’s to sell its business, arguing that the department chain could acquire more value from its real estate.

Macellum, which owns nearly 5% of Kohl’s stock, sought to take control of its board last month by nominating ten directors. Kohl’s published a separate letter to its stakeholders, calling the firm’s efforts unwarranted, unjustified, and majorly concerning. Ahead of the yearly meeting on May 11, the retail chain has requested stakeholders to vote for all its board members.

With over 1,100 stores in the U.S. and registering annual sales of close to USD 19 billion, Kohl’s is America’s largest department store chain. But since 2011, it has lost nearly 17% of its market share, mainly to off-price retailers like TJMaxx, along with e-commerce companies like Amazon.

Source credit:

https://www.cnbc.com/2022/03/21/kohls-confirms-it-has-received-multiple-preliminary-buyout-offers.html



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Pankaj Singh

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Pankaj Singh

Pankaj Singh Develops content for Market Size Forecasters, Algosonline, and a couple of other platforms. A Post Graduate in Management by qualification, he worked as an underwriter in the UK insurance domain before deciding to switch his field of profession. With exp...

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