The Vitamin Shoppe Parent Franchise Group Offers $9B for Kohl’s

Franchise Group Inc., which owns and operates retail stores including The Vitamin Shoppe and Buddy’s Home Furnishings, has submitted a $9 billion indicative offer for department store retail chain Kohl’s, three people familiar with the situation told Reuters Tuesday (April 12).

The Franchise Group’s offer would be equal to $69 per share, still short of the bid by Canadian luxury department store chain Hudson’s Bay, which has said it would pay at least $70 per share to acquire Kohl’s. The company’s stock was trading at almost $61 in early trading Tuesday.

Activist owners at Kohl’s, including hedge fund operators Macellum Advisors, have been pushing the company to sell outright or consider spinning off its eCommerce operations. Kohl’s carried $6.8 billion in debt at the end of 2021, including its operating leases.

A group led by private equity firm Leonard Green & Partners LP and including Authentic Brands, also has tried to buy Kohl’s, the sources told Reuters. Private equity firm Sycamore Partners and a group including Acacia Research Corp. made offers for the company in the first round but it’s unclear if they remain in the bidding.

Kohl’s operates more than 1,100 stores across the U.S. In February, Macellum nominated 10 directors to the company’s 14-member board. Kohl’s officials say their investment bankers have talked to more than 20 potential buyers, the report says.

Related: Kohl’s Gets ‘Multiple’ Non-Binding Buyout Offers

The “multiple” preliminary offers Kohl’s received in March were considered “non-binding and without committed financing,” the company said in a press release, adding that they hired Goldman Sachs to coordinate the next steps with buyers. Kohl’s wouldn’t reveal the identities of the bidders.

Acacia Research recently offered Kohl’s $64 and $65 per share but those offers were deemed too low by company officials, who are said to be seeking more than $70 per share. Activist investors in Kohl’s, including Macellum, have been pushing for Kohl’s to sell, saying its real estate would boost the value of the entity for buyers.