Kohl's Confirms Takeover Interest
Kohl’s Corp. confirmed yesterday that it has received letters expressing interest in acquiring the company, following reports over the weekend that two firms are preparing bids to purchase it. Kohl’s, however, hasn't decided what course of action it will take yet. According to a press release, Kohl’s board of directors "will determine the course of action that it believes is in the best interests of the company and its shareholders. Shareholders are not required to take any action at this time." Furthermore, the retailer said it doesn't intend to further comment publicly on these matters "unless it determines it's in the best interests of shareholders to do so."
The two firms interested in Kohl's, according to reports, are Acacia Research, a group controlled by hedge fund Starboard Value, and private equity firm Sycamore Partners, which owns several retailers. Acacia offered $9 billion, which is a significant bump over the retailer's share price, according to a report in The Wall Street Journal on Friday. Sycamore Partners and Oak Street Real Estate Capital are reportedly considering bids for the retailer.
Total Retail's Take: Kohl's has been facing pressure from activist investors to make a change to its current operations in an effort to boost shareholder value. Ideas have ranged from shaking up its board, to splitting off its e-commerce business, to selling itself or its real estate, for the last several months. In fact, late last year, Kohl's faced pressure from activist hedge fund Engine Capital LP, which asked management to consider the sale or the separation of the e-commerce division, arguing in a letter to Kohl's management it could be valued as high as $12.4 billion. Of course, Kohl's isn't the only department store chain that has been sought out by activist investors to improve shareholder value. Competitors such as Macy's and Nordstom have been sought out as well, as these types of retail establishments have been losing market share to off-price and online chains in recent years.