Kohl’s Tries to Rally Investors Against Activist Takeover

Kohl’s is calling on its investors to reject a bid by activist investor Macellum Advisors to add new members to the department store chain’s board.

“Macellum is attempting to take control of your Board with an inexperienced, unqualified slate,” the company said in a letter to investors released Thursday (March 31). “Six of ten nominees have never served on a public company board, and none have served on a retail company board of comparable size to Kohl’s.”

The latter also accuses Macellum of “promoting an ever-changing narrative, misinformed claims, and value-destructive proposals, all of which reveal a reckless and short-term approach that is not in the interest of driving long-term, sustainable value.”

Macellum has nominated 10 people to Kohl’s board, including its managing partner Jonathan Duskin, who last month cited Kohl’s ongoing “underperformance” in a letter to Kohl’s executives.

Read more: Activist Investors Nominating 10 New Kohl’s Board Members

“We need to question whether the Board is fully cognizant of its obligations given it has yet to announce the Company will run an open, fair and fulsome process to evaluate all potential offers that could maximize value for shareholders,” he wrote.

Macellum has also pushed for Kohl’s to consider putting itself up for sale. The retailer has begun considering bids for the company, and earlier this month said it had gotten an offer from HBC, which owns Saks Fifth Avenue.

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

Meanwhile, Acacia Research recently offered Kohl’s $64 and $65 per share, but those numbers were too low for company officials. Activist investors such as Macellum have been calling on Kohl’s to sell, saying the company’s real estate would boost the value of the entity for buyers.

In the letter to investors, Kohl’s argues that Macellum is promoting a “hasty sale at any price,” which “reveals a short-term approach that is not in the best interest of Kohl’s shareholders.”

As for its discussions with possible buyers, the company said it is “assisting with further due diligence that may create opportunities to refine and improve proposals.”