Kohl’s Shares Surge Monday as Takeover Offers Being Considered

Jan 24, 2022 By MarketDepth

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Kohl’s (NYSE: KSS) shares surged over 31% Monday, as the department chain continues to contemplate takeover offers from two suitors. Ultimately, the offers potentially value the retailer around USD9 Billion.

“The Kohl’s Board of Directors will determine the course of action that it believes is in the best interests of the Company and its shareholders. Shareholders are not required to take any action at this time.”

Kohl’s said in a press release

Private equity firm Sycamore is prepared to pay a minimum of USD65 per share for Kohl’s, a 39% premium to the stock’s previous close of USD46.84, according to people familiar with the matter. Furthermore, The Wall Street Journal reported Acacia Research had offered USD64 per share which is a 37% premium to the last closing.    

In a letter, Engine Capital, a long-term shareholder of Kohl’s Corporation, prompted Kohl’s to consider its options.

“Over the weekend, we read with interest multiple press reports stating that a Starboard-led consortium has offered USD64 per share in cash for Kohl’s. When the board of directors of a company, whose stock has underperformed for so long, receives a credible offer at a 37% premium, it has a fiduciary obligation to aggressively pursue it, while openly considering all alternatives to maximize value. It can’t simply dismiss the offer and argue that the standalone plan will produce greater long-term value for shareholders.”

Kohl’s said in a press release

The offers come as the retailer continues to face pressure from activist investors to better its business and increase its stock price.