Starboard slashes stake in Kohl's after seeking to buy it in January

Acacia Research

12/08/2022 23:11

By Svea Herbst-Bayliss
    BOSTON, Aug 12 (Reuters) - Activist hedge fund Starboard
Value, which had offered to buy Kohl's Corp  KSS.N  for roughly
$9 billion early this year, slashed its stake in the department
store by more than 80% in the second quarter, according to a
regulatory filing on Friday evening.
    Starboard sold 2.8 million shares during the quarter,
leaving it with 535,029 shares on June 30.
    Starboard first invested in Kohl's during the first quarter
of 2022 and the firm owned 2.59% of the company's stock, making
it a top 10 holder. Investment managers are beginning to release
their quarterly holdings before Monday's so-called 13-F filing
deadline which details what they owned in U.S.-based companies
on June 30. 
    In early January, before takeover talk for Kohl's heated up,
 the stock traded around $50 a share. On Friday, Kohl's shares
closed at $33.18. 
    On July 1, Kohl's said it had called off its sale to
Franchise Group, sending the company's shares tumbling.
    Starboard-backed Acacia Research Corp  ACTG.O  in January
offered to buy Kohl's for $64 a share and told the company it
had assurances of obtaining financing for the deal. Kohl's
rejected Starboard's overtures.
    Months later the company agreed to negotiate exclusively
with Franchise Group Inc  FRG.O , which owns Vitamin Shoppe and
Buddy's Home Furnishings. In late June, Franchise Group cut its
offer for Kohl's to $53 and by the end of the month the company
called off the planned deal, citing market volatility which had
made financing conditions difficult.
    Kohl's defeated hedge fund Macellum Advisors' proxy contest
to win board seats in part with arguments that the current board
should oversee the sales process which was ongoing.   
    
    

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