(Bloomberg) — Sycamore Partners has reached out to Kohl’s Corp. about a potential takeover offer, ratcheting up pressure on the retailer that activist investors are pushing to sell itself, according to people familiar with the matter.
It’s unclear how much the private equity firm is willing to pay for the company, the people said, asking not to be identified because the matter is private. Talks are preliminary and might not result in a deal, they added.
A representative for Sycamore declined to comment while a representative for Menomonee Falls, Wisconsin-based Kohl’s couldn’t immediately be reached for comment.
Kohl’s already is fielding a $9 billion offer backed by Starboard Value LP through its affiliate Acacia Research Corp., Bloomberg News reported Friday. Acacia has a stake of less than 5% in the department store chain, people familiar with the matter said at the time. The group offered $64 a share in cash, according to two of the people, who asked not to be identified because the information was private. That’s a 37% premium to the department store chain’s closing price on Friday.
The retailer is under fire from activist investor Macellum Advisors, which has been urging Kohl’s to make board changes or consider a sale in a letter to shareholders in recent weeks. The retailer has sought to boost foot traffic and sales at its stores through partnerships with other retailers, most notably e-commerce giant Amazon.com Inc.
In 2020, Kohl’s struck a deal with beauty products retailer Sephora to place shop-in-shops within the department-store chain. Kohl’s is also betting on athletic-leisure wear and said it sees sales in athletic wear being at least 30% of the business. Executives also often point to the fact that Kohl’s has advantages that other department-store chains don’t have by being mostly located in off-mall locations.
Engine Capital LP, which owns about 1% of Kohl’s outstanding shares, sent a letter to the board in December urging them to run a review of strategic alternatives, including a sale of the company, last month. Kohl’s was reported as a potential take “private candidate” in May last year.
(Updates with context on Acacia-led bid, retailer’s partners and Engine Capital letter)
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