Kohl’s Enters Talks With Vitamin Shoppe Owner Franchise Group to Discuss Sale
Kohl’s is progressing towards a deal with a potential suitor interested in buying its business.
The Menomonee Falls, Wisconsin-based retailer announced on Monday that it has entered into exclusive negotiations with Franchise Group, Inc. for a three-week period to discuss an offer to sell Kohl’s for $60 per share. The announcement comes shortly after Kohl’s reportedly received two renewed offers to sell itself last week.
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Kohl’s shares were up over 12% on Tuesday morning following the announcement.
According to Kohl’s, the exclusive three-week period is meant to allow both parties and their partners enough time to complete negations for the sale. The deal is subject to approvals from the Boards of Directors of both companies.
FN has reached out to Franchise Group for a comment.
Franchise Group, the owner and operator of retail chains including the The Vitamin Shoppe, Buddy’s Home Furnishings, and Pet Supplies Plus, reportedly placed a $9 billion offer to acquire Kohl’s in April at a deal priced at $69 per share. According to a report last week, Franchise Group made a renewed bid at around around $60 per share.
Kohl’s on Thursday also reportedly received an offer from private-equity firm Sycamore Partners at a deal priced in the mid-$50s per share. This offer also fell below a previously reported bid from this party at about $65 per share, in the wake of a disappointing earnings report from the struggling department store retailer.
Kohl’s reported a decrease in net sales and comparable sales in Q1. Net income came in flat compared to the same period last year at $14 million in the first quarter of 2022.
According to Morningstar analysts, Kohl’s could be hit with some store closures in the not-so-distant future as 10 of its property leases near expiration before fiscal year 2023.
Other interested parties have also reportedly entered bids for Kohl’s in recent months. In April, Simon Property and Brookfield Asset Management, the owners of department store chain JCPenney, reportedly made an offer to acquire Kohl’s at a deal valuing Kohl’s at more than $8.6 billion, or $68 per share.
HBC’s Hudson’s Bay Co., which owns Hudson’s Bay and Saks, also reportedly entered the race for Kohl’s in March with a bid of at least $70 per share, Reuters reported. Acacia Research also reportedly offered to pay about $64 a share for the department store chain.
In March, Kohl’s confirmed that it was weighing offers from multiple parties that were interested in purchasing the company. Macellum Advisors, which owns nearly 5% of shares at Kohl’s, has expressed skepticism about the future of the company and has asked Kohl’s to consider taking an offer to sell its business.
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