Kohl’s has been the recipient of takeover bids from private equity firm Sycamore Partners and Franchise Group, a retail holding company, The Wall Street Journal (WSJ) wrote Thursday (June 2).
Sycamore will value the department store chain at around the mid-$50s a share, with Franchise Group offering around $60. Kohl’s closed Thursday at $41.18.
The Kohl’s board, while short on the details of the bids, will be looking into them. However, there’s no guarantee that the board will be receptive. Any deal would likely still be several weeks away.
The company has been in the midst of various talks for some time now.
According to the report, Kohl’s has recently shot down an activist investor campaign to overhaul its board, though shares have fallen 17% this year.
In March, reports said Kohl’s had some interest from Sycamore along with Hudson’s Bay of Canada, which is a parent of Saks.
All of this comes as Kohl’s has indicated that it thinks the company is worth at least $70 a share although market conditions have been worse since then.
Kohl’s has seen issues even pre-pandemic, with an operating margin falling to 6.1% in 2019 compared to 11.5% from 2011, despite few changes in its operation.
The report noted that merger activity has slowed down in recent weeks. The factors such as interest rates and market volatility have made deals more expensive.
Kohl’s has been going through several changes, including an announcement from the end of May saying the store would be rolling out a new store investment program to add 100 small-format stores in the next four years.
The announcement comes as the retailer is trying to shake up the current operation of the company.
Through a shrinking of the footprint, Kohl’s plans to get more flexibility and go into more neighborhoods with a “hyper-localized experience” reflecting the needs of a community.