Activist Letter Steps Up Pressure on Kohl’s
Macellum Advisors, which holds nearly 5 percent of the outstanding common shares of Kohl’s Corp., on Tuesday issued another letter to the company’s board imploring it to pursue strategies geared to enhance shareholder value.
Macellum’s second letter follows its letter last week encouraging Kohl’s board to initiate a comprehensive review of strategic alternatives, including a potential sale of Kohl’s, and indicating there were serious potential suitors. Days later, two bids to buy the company from Acacia Research Corp. and Sycamore Partners came to light. Acacia is offering $64 a share.
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Macellum in its most recent letter said Kohl’s board “quickly responded to us with a dismissive press release that referred to our assessment of potential suitors as ‘unfounded speculation.’ Now, less than one week later, the board has validated our assessment by confirming expressions of interest.”
On Monday, Kohl’s stock price soared on news of the bidders, which Macellum wrote “indicates to us that investors want an organized sales process.”
“In our view, the board cannot ignore yesterday’s approximately 35 percent spike in the company’s share price and try to chill acquirers’ interest,” Macellum wrote.
“Rather than cling to the status quo, we urge the board to immediately take the following steps to try to maximize value for all shareholders: publicly commit to carrying out a robust process to review strategic alternatives; form a special committee of independent directors to oversee the review, retain advisers and solicit proposals from all interested bidders, and invite a Macellum representative to join the board and lead the special committee, effectively providing credibility to the process. Macellum was already successful last year, forcing Kohl’s to reorganize its board with three new members.”
Tuesday’s letter was signed by Jonathan Duskin, managing partner, Macellum Capital Management.
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