Kohl’s shares soar as Sycamore, Acacia offer takeover offers
By Shubhangi on Jan 25, 2022 | 03:35 AM IST
• Sycamore offered to pay at least $65 per share for Kohl’s
• Acacia Research offered to pay $64 per share for the company
Kohl’s Corp. (NYSE: KSS) shares soared more than 30% on Monday, as the department store chain has potential takeover offers from two companies.
Private equity firm Sycamore offered to pay at least $65 per share for Kohl’s, which is a 39% premium to its last stock close.
Kohl’s also got an offer from Acacia Research (NYSE: ACTG) to pay $64 per share for the company. Acacia Research is backed by activist investment firm Starboard Value. Acacia and Starboard are likely to partner with Oak Street Real Estate Capital for the deal with Kohl’s, reported CNBC.
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In a statement, Kohl’s confirmed that it received offers for acquiring the business. Kohl’s said its board of directors “will determine the course of action that it believes is in the best interests of the company and its shareholders.”
Pressure from investors
Kohl’s has been recently facing pressure from activist investors Macellum Advisors and Engine Capital to improve its business.
Kohl’s, in turn, said that its sales and profitability grew in the fiscal third quarter and it has also launched new initiatives such as Sephora shops inside its stores.
Kohl’s second quarter net sales and earnings also exceeded expectations and the company raised full year 2021 financial outlook.
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Kohl’s, in April, reached a deal with some activists to add two of the group’s nominees to its board as independent directors.
Michael Binetti, Credit Suisse analyst, wrote in a note that Kohl’s could warrant a per-share value of $70 to $80.
“We do think there’s some merit to Kohl’s embracing a slightly more aggressive real estate strategy to bolster shareholder returns today,” said Binetti, in a note to clients.
Picture Credits: Reuters