Kohl’s Holding Exclusive Talks with Franchise Group Over an $8 Billion Deal
2022.06.07 14:42
Kohl’s (KSS) Holding Exclusive Talks with Franchise Group Over an $8 Billion Deal
By Senad Karaahmetovic
Kohl’s (NYSE:KSS) confirmed it is holding talks to sell itself to the holding company Franchise Group (NASDAQ:FRG) in a deal that would value the department store retailer at about $8 billion or $60 per share.
Shares of Kohl’s are up around 10% in premarket trading Tuesday.
Franchise Group is reportedly collaborating with Oak Street Real Estate Capital to fund the acquisition mainly through real estate. The deal awaits approval of both companies’ boards, Kohl’s stated, though there is no guarantee that the deal will be closed.
Franchise Group and its partners have a 3-week exclusive period to complete the funding arrangements and due diligence. The parties concerned will also have to finalize the negotiation of binding documentation during that period, said the retailer.
The saga of Kohl’s potential sale first began half a year ago when the hedge fund Engine Capital pushed the retailer to consider a sale or another deal to raise its stock price, which was trading at about $48.45 at the time.
Just a month later, another hedge fund, Macellum Advisors, also urged Kohl’s to explore sale options, with the fund’s CEO Jonathan Dusking claiming that Kohl’s executives were “materially mismanaging” the company’s business.
