Former Canada Prime Minister's hedge fund pushes Kohl's to sell itself -sources

Burlington Stores

06/02/2024 19:37

By Svea Herbst-Bayliss
       Feb 6 (Reuters) - An activist hedge fund chaired by
former Canadian Prime Minister Stephen Harper is pushing U.S.
department store operator Kohl's  KSS.N  to sell itself,
according to people familiar with the matter. 
    Kohl's rejected acquisition offers worth as much as $64 per
share in 2022, when it also came under pressure from several
activist shareholders to explore a sale. 
    It held on for a bid worth more than $70 per share that
never came, and has since struggled to make its stores more
profitable and grow its e-commerce business. Its shares are now
hovering at around $26.  
    Vision One Management Partners, a fund co-founded by Harper
and former Carl Icahn protégé Courtney Mather, has built a stake
in Kohl's and expressed concerns to the company about its
future, the sources said.
    Vision One has asked Kohl's to launch a sale process and
also give it board representation, the sources added, requesting
anonymity because the matter is confidential.
    Kohl's was not available for comment and Vision One did not
respond to requests for comment.
        The development makes Kohl's the second U.S. department
store operator to come under investor pressure to sell itself in
as many months. Last month, Macy's  M.N  rejected a $5.8 billion
offer to be taken private by investors Arkhouse Management and
Brigade Capital Management, on the grounds it was too cheap and
may not have the necessary financing.  
        Kohl's operates more than 1,100 stores across the United
States and a has a retail partnership with LVMH's  LVMH.PA 
beauty products retailer Sephora. Its sales have been steadily
declining as it struggles to attract more shoppers.
    Ancora Holdings, Macellum Capital Management and Legion
Partners Asset Management are among the other activist hedge
funds that have pushed for changes at Kohl's.
    The company is led by former off-price chain Burlington
Stores CEO Tom Kingsbury, who joined the Kohl's board in 2021
with backing from Macellum and Ancora. He replaced Michelle
Gass, who left in 2022 to join jeans maker Levi Strauss & Co
 LEVI.N , as permanent CEO in 2023.
    Vision One, located in Miami, Florida, and launched in 2022,
invests primarily in mid-sized American companies in the
industrial and consumer sectors, according to a regulatory
filing. It oversaw roughly $128 million in assets as of May,
2023.
        An economist by training, Harper spent most of his
career in politics. He co-founded the modern Conservative Party
of Canada and won three successive elections in 2006, 2008, and
2011. He also owns his own consulting firm. 
    Mather, formerly a portfolio manager for billionaire
activist investor Icahn, is a director at Caesars Entertainment
and previously held board positions at Herc Holdings and CVR
Energy.

 (Reporting by Svea Herbst-Bayliss in Rhode Island; editing by
David Evans)
 ((svea.herbst@thomsonreuters.com; +617 233 2138; Reuters
Messaging: svea.herbst.thomsonreuters.com@reuters.net))