Shares of Kohl’s Corporation (NYSE:KSS) have surged over 31% on Monday after private equity firm Sycamore and hedge fund Starboard Value LP made the department store giant takeover offers. Both represent an improvement on the company’s current share price of $46.84.
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Takeover Offer
As reported by CNBC, buyout offers by Sycamore and Starboard Value LP have sent the shares of Kohl’s up, with the equity firm willing to splash a minimum of 65% per share, which represents a 39% premium to the stock’s close of $46.84 on Friday.
“The offer from Sycamore came two days after Acacia Research, backed by activist investment firm Starboard Value, offered to pay $64 a share for Kohl’s,” the media outlet informs.
Further, according to the same sources quoted by CNBC, Acacia and Starboard are bound to team up with Oak Street Real Estate Capital to sell off the store’s real estate to raise more money —something Kohl’s has opposed to in the past.
Although the store said it will issue no comment on the details, it acknowledged it has received offers and the board of directors “will determine the course of action that it believes is in the best interests of the company and its shareholders.”
Catching Up
Macellum Advisors and Engine Capital have been pressing Kohl’s to mend its business and hence increase its stock price. Kohl’s has deployed a strategy that —according to the company itself— boosted sales and profitability in Q3 and included the opening of Sephora shops at specific stores.
In a note to clients, Credit Suisse analyst Michael Binetti also said: “We do think there’s some merit to Kohl’s embracing a slightly more aggressive real estate strategy to bolster shareholder returns today.”
CNN Business reports that Kohl's has been in a tough spot for months since several activist investors have addressed the board and publicly promoted a change in “leadership, company strategy, or both.”
Some other activities that Kohl’s has carried out to fight off brick-and-mortar monsters and discount chains include a partnership with Amazon Inc (NASDAQ:AMZN) to offer returns to the e-commerce’s customers, including other clothing brands, as well as leasing out in-store space to Planet Fitness Inc (NYSE:PLNT) and Aldi at some premises.
