Kohl’s Dismisses Takeover Bids as Too Low

Kohl’s Corp. has rejected a pair of takeover bids for being too low, and will now work with bankers to find a possible suitor for the company.

As Bloomberg reported Friday (Feb. 4), Sycamore Partners and a potential buyer backed by hedge fund Starboard Value LP had engaged with Kohl’s about a possible sale amid pressure from activist investors to sell the retailer.

It’s not clear what Sycamore would have offered for the chain, but Bloomberg says Acacia Research Corp., the Starboard-backed suitor, had offered $64 a share, or about $9 billion.

That works out to a premium of more than 30% of where the company was trading last month when shareholder Macellum Advisors rekindled a push for the company to consider a sale.

Read more: Kohl’s Urged to Sell Company or Spin off eCommerce Business

In December of last year, another shareholder — the New York-based hedge fund Engine Capital — called on Kohl’s to either sell the company or separate its eCommerce operations in response to tumbling stock prices. Kohl’s saw its share drop 25% last year.

Engine argued that the company’s online sales revenue alone, estimated at about $6.2 billion, would value the company’s digital business at $12.4 billion. The hedge fund also said there would likely be private equity firms willing to pay around $75 a share, pointing to interactions with buyers that convinced it that Kohl’s real estate could be monetized.

In a statement Friday, Kohl’s said the bids valued its future growth and cash flow generation. The company has appointed a board committee to examine future offers and will work with financial advisors that include Goldman Sachs Group Inc. and PJT Partners Inc., to interact with prospective buyers. Kohl’s has also adopted a “poison pill” that will make it more difficult for the company to be acquired without the board’s approval.

Kohl’s board of directors is “committed to acting in the best interest of shareholders and will continue to closely evaluate any opportunities to create value,” Chairman Frank Sica said.