The Kohl’s logo is displayed on the outside of a Kohl’s store on January 24, 2022 in San Rafael, California.
Justin Sullivan | Getty Images
Kohl’s said Monday it has entered into exclusive negotiations with retail holding company Franchise Group, which is proposing to buy the retailer for $ 60 a share.
Such a price would value Kohl’s at about $ 8 billion.
Kohl’s shares closed Monday at $ 42.12, giving the retailer a market value of about $ 5.4 billion.
Franchise Group is working with Oak Street Real Estate Capital to finance the deal primarily through real estate, according to a person familiar with the matter. The person has requested anonymity because the agreement has not been finalized.
An Oak Street Real Estate representative declined to comment.
The transaction remains subject to approval by the two companies’ boards of directors, Kohl’s said in a press release. There is no guarantee that any agreement will be reached, he said.
The exclusive three-week period will allow Franchise Group, owner of Vitamin Shoppe and Buddy’s Home Furnishings, among other brands, and its financing partners to complete due diligence and financing agreements, and for the parties to complete the negotiation of the binding documentation. , Kohl’s. dit.
The retailer added that he will have no further comments until an agreement is reached or discussions are completed.
Kohl’s saga has been around for over half a year.
The department store chain outside the mall was first urged in early December 2021 by hedge fund based in New York Engine Capital to consider a sale or other alternative to raise the price of its shares. At the time, Kohl’s shares were trading at about $ 48.45.
In mid-January, activist hedge fund Macellum Advisors pressured Kohl’s to consider a sale. Macellum CEO Jonathan Duskin argued that executives were “materially mismanaging” the business. He also said Kohl’s had a lot of potential to unlock with its real estate.
In early February, Kohl’s said it had hired bankers from Goldman Sachs and PJT Partners to help offer the retail field.
Last month, Kohl’s reported that sales for the three-month period ended April 30 fell to $ 3.72 billion from $ 3.89 billion in 2021. The company also lowered its forecast for profits and revenue for the entire fiscal year, disappointing investors and tarnishing the image for a possible deal.
Kohl’s shares hit a 52-week high of $ 64.38 at the end of January.