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Kohl’s receives $ 9 billion bid from starboard value group




A consortium backed by activist hedge fund Starboard Value LP has offered about $ 9 billion to buy Kohl’s department store Corp.

KSS -2.60%

, according to people familiar with the matter.

A group led by Acacia Research Corp., which Starboard controls, offered to buy the department store chain for $ 64 per share in cash on Friday, people said. It told the company that it has received assurances from bankers that it would be able to get financing for the bid, the people said.

There are no guarantees that the group will eventually provide all the funding needed and make a firm offer or that Kohl’s will be receptive. Other suitors may also appear.

Kohl’s shares closed at $ 46.84 on Friday. The bid represents a premium of 37%.

Based in Menomonee Falls, Wisconsin, Kohl’s has been under pressure to raise its share price, which rose early last year but has changed little since about two decades ago. Two activist shareholders – Macellum Advisors GP LLC and Engine Capital LP – have recently encouraged the company to explore selling itself.

Kohl’s said earlier this week that their strategy is yielding results and that the board “regularly works with specialized advisors to evaluate paths that have the potential to create long-term value.” It said it plans to unveil its strategic plans at an investor day in March.

Little known Acacia has a market value of only $ 215 million, but the consortium told Kohl’s that they received what is known as a “very confident” letter from a bank claiming that it will be able to obtain a debt financing package for part of bidet, sa folket. Although such letters are not a guarantee, they can be a meaningful vote of confidence.

Led by CEO Jeff Smith, Starboard Value is one of the most visible activist investors.


Photo:

Christopher Goodney / Bloomberg News

Other details about the consortium’s proposal – and who is in the group – could not be determined. Reuters reported earlier this week that Acacia was investigating a possible bid for Kohl’s.

Should it succeed, the group may aim to sell the company’s property to another party, which may make it easier to complete the transaction. Activists have suggested that Kohl explore sale-leasebacks of his property, which they have estimated could be worth $ 7 billion or more.

Macellum said in an open letter to Kohl’s shareholders on Tuesday that it has pressured the company to add more directors with retail experience or to hire bankers to explore a sale.

Before Starboard invested in the company and joined the board in 2019, Acacia was primarily a holding company for patents. It now focuses on buying and improving companies. In October, it bought privately owned Printronix Holding Corp., a manufacturer of line matrix printers, for $ 33 million, and has made offers to other companies, including Comtech Telecommunications. Corp.

Starboard, led by CEO Jeff Smith, is one of the most visible activist investors. It has seats on the boards of companies including Papa John’s International Inc.

and NortonLifeLock Inc.

Write to Cara Lombardo at cara.lombardo@wsj.com

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Appeared in print on January 22, 2022 as “Group offers to buy Kohl’s for $ 9 billion.”



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