Macellum asks Kohl's for board seat, public commitment to explore sale

Acacia Research

25/01/2022 12:30

By Svea Herbst-Bayliss
    BOSTON, Jan 25(Reuters) - Activist hedge fund Macellum
Advisors, which wants Kohl's Corp  KSS.N  to consider putting
itself up for sale, is now pressing the U.S. retailer for at
least one board seat and a public statement that the company is
reviewing strategic alternatives, according to a letter reviewed
by Reuters.
    Macellum, which owns roughly 5% of Kohl's stock, sent the
letter hours after Acacia Research Corp  ACTG.O , backed by
activist investor Starboard Value, on Monday confirmed https://www.reuters.com/business/retail-consumer/sycamore-partners-approaches-kohls-with-potential-takeover-offer-bloomberg-news-2022-01-23
 an offer to buy the company for $64 a share, valuing Kohl's at
roughly $9 billion.  urn:newsml:reuters.com:*:nFWN2U41PH
    In addition to Acacia's bid, Sycamore Partners is also
preparing an all-cash offer for Kohl's at $65 per share, sources
said on Sunday.  urn:newsml:reuters.com:*:nL1N2U30IJ
    Kohl's shares surged 36% https://www.reuters.com/business/retail-consumer/kohls-shares-soar-sycamore-acacia-show-takeover-interest-2022-01-24
 on Monday to close at $63.71.
    "The best risk-adjusted path forward for shareholders right
now is a credible and open process to evaluate a full sale of
the company at an attractive premium," Macellum's managing
partner Jonathan Duskin wrote. "Investors want an organized
sales process."
    He wants Kohl's to provide at least one unconditional board
seat for a Macellum representative and to have that person lead
a new committee that will oversee the review process, the letter
said.
    "We do not have faith in the current board to run this
process on its own, nor do we believe the Board is capable of
objectively evaluating possible bids," Duskin wrote.
    A representative for Kohl's did not immediately respond to a
request for comment.
    Kohl's is exploring its options, including a possible sale,
with advice from investment bank Goldman Sachs, two sources
familiar with the matter said.
    The people with knowledge of the matter declined to be
identified because they were not permitted to discuss it
publicly.
    Pressure has been building on Kohl's since last week when
Macellum said it planned to nominate directors to the board and
wanted the company to consider a sale, and when Reuters reported
that Acacia Research was preparing a bid for the company.
 urn:newsml:reuters.com:*:nL1N2TY16E
    Duskin is ratcheting up that pressure less than a year after
he and others reached a settlement that saw the company add
three new directors.
    He said in the letter reviewed by Reuters that he may take
legal action or run another proxy contest if Kohl's board
"chills" a sale process.

 (Reporting by Svea Herbst-Bayliss; Editing by Kenneth Maxwell)
 ((svea.herbst@thomsonreuters.com; +617 856 4331; Reuters
Messaging: svea.herbst.thomsonreuters.com@reuters.net))