The owners of JCPenney have made an offer to buy arch-rival Kohl’s in an agreement that can value the department store chain to upwards of 8.6 billion dollars, The Post has been told.
According to the proposal, the mall giant Simon Property and Canada-based Brookfield Asset Management – which together took JCPenney out of bankruptcy in December 2020 – have offered to buy Kohl’s for 68 dollars per share, according to sources close to the negotiations.
Kohl’s shares on Monday were recently traded at $ 56.43, down 0.9 percent.
A well-placed source told The Post that the plan is for JCPenney̵[ads1]7;s business parents to continue to maintain two separate brands while streamlining operations and reducing costs. Bidders’ plan for Kohl’s is to cut costs by $ 1 billion over the next three years, according to the source.
The Post has contacted Simon Property Group and Brookfield Asset Management for comment.
Kohl’s, based in Wisconsin, went on sale earlier this year at the urging of activist investors Macellum and Engine Capital, who were dissatisfied with the company’s management.
Private equity giants Sycamore Partners and Leonard Green & Partners as well as Saks Fifth Avenues Canada-based parent company Hudson’s Bay are reportedly interested in buying Kohl’s.
Goldman Sachs has been used to lead a potential sales process.
Simon and Brookfield have proposed that a single management team run JCPenney and Kohl’s while merging information technology systems so that one unit is responsible for the chains, according to a source. The companies will also have all private clothing produced by the same internal label, the source said.
If the sale is completed, the new business will drop plans to roll out Sephora licensing stands inside Kohl’s locations, The Post has been told.
Simon Property Group is run by CEO David Simon, son of the late company’s co-founder Melvin Simon. David Simon’s uncle, Herb Simon, who founded the company with his late brother, is the owner of the NBA’s Indiana Pacers – the team the Simon brothers bought in 1983.
Simon Property Group and Brookfield Asset Management acquired JCPenney after the 118-year-old dealer filed for Chapter 11 bankruptcy in May 2020.
JCPenney was one of two dozen retail victims of the coronavirus pandemic, as shutdown measures prevented personal shopping while consumers turned to online alternatives such as Amazon.
The restructuring forced the closure of a third of the stores nationwide. At present, there are only 689 JCPenney locations in operation – down from more than 1110 in 2012.