Kohl's under fresh pressure as Sycamore expresses interest after Acacia made bid (updated)

Acacia Research

23/01/2022 22:02

(Adds details on Sycamore's planned bid for Kohl's, changes
sourcing, adds details on pressure on Kohl's)
    By Svea Herbst-Bayliss
    Jan 23 (Reuters) - U.S. department store Kohl's Corp  KSS.N 
may soon receive a second takeover offer as private equity firm
Sycamore Partners prepares to make a bid only days after a
consortium backed by activist investment firm Starboard Value
proposed buying the company, three sources familiar with the
matter said on Sunday.
    Sycamore Partners has reached out to Kohl's about a
potential offer that would value the company around $9 billion,
one source said. The firm is willing to pay at least $65 a share
in cash for the company, the source said.
    The news comes two days after Acacia Research  ACTG.O ,
which is backed by Starboard, offered to pay $64 a share for
Kohl's, confirming a Reuters report last week that Acacia had
reached out to the company to express its interest in a
takeover. urn:newsml:reuters.com:*:nL1N2TY16E
    There are no guarantees that Sycamore Partners will make a
bid or that a deal will be reached with either Sycamore or
Acacia, the sources said. Bloomberg first reported Sycamore's
interest on Sunday and the Wall Street Journal reported the
Acacia bid on Friday.
    Representatives for Sycamore, Acacia and Kohl's did not
immediately respond to requests for comment.
    Sycamore's interest in Kohl's illustrates investors ongoing
interest in retailers and the troubles that brick and mortar
retailers are facing as the pandemic has largely prompted
customers to shift buying habits in favor of online retailers. 
    Kohl's has been facing pressure from activist investors to
perform better for roughly a year and their ongoing unhappiness
has become more visible in the last weeks after the company's
share price climbed only 5% in the last year.
    Last week activist investment firm Macellum Advisors, which
owns 5% of Kohl's stock, told the company to explore strategic
options, including a sale, and warned it planned to nominate
directors to its board. Late last year activist firm Engine
Capital also said it wants Kohl's to consider a sale. 
    Macellum's fresh pressure comes less than a year after it,
along with two other activists, reached a settlement that saw
Kohl's add three new directors to the board. Macellum called
2021 "another lost year" at Kohl's and criticized the stock
price's 22% drop from April through last week.
    Kohl's said last week its "strategy is producing results"
and management and the board "refuse to be distracted" from
delivering stronger results for all investors.
    Sources said Acacia and Starboard, one of the industry's
most respected and busiest activist investors, would likely work
with Oak Street Real Estate Capital to try and sell off Kohl's
real estate holdings to raise additional capital for a
transaction. Kohl's has historically been opposed to
sale-leasebacks of its real estate.

 (Reporting by Svea Herbst-Bayliss in Boston and Jaiveer Singh
Shekhawat in Bengaluru; Additional reporting by Bhargav Acharya;
Editing by Andrea Ricci and Chris Reese)
 ((svea.herbst@thomsonreuters.com; +617 856 4331; Reuters
Messaging: svea.herbst.thomsonreuters.com@reuters.net))