Sycamore and Franchise Submits Bids for Kohls

By:
on Jun 4, 2022
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  • Sycamore proposed a deal of $50 per share and Franchise Group gave a bid of about $60 a share.
  • Kohl’s Corp board of directors are expected to meet and review the proposals in the coming days.
  • Kohl's shares have dropped by around 17% this year.

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Sycamore Partners and Franchise Group Inc (NASDAQ: FRG), a retail holding company, has submitted bids to takeover control of Kohl’s Corp (NYSE: KSS). Sycamore proposed a deal of $50 per share and Franchise Group gave a bid of about $60 a share. Both proposals put the value of the company between around $7 billion to $8 billion.

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Both bidders had previously wanted to lower their proposals by around 10% to 15%. When this news came to light, Kohl’s shares jumped by about 6.8%.

Details of the proposals

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People close to the deal said that Sycamore’s proposal values the Wisconsin-based retail-chain around $50 per share. On the other hand, Franchise Group felt a bid of around $60 per share would be ideal.

The retail chain based in Wisconsin has been entertaining takeover bids for months now. However, it’s not clear whether there are any other takeover bids that have been submitted by other business entities.

Kohl’s Corp board of directors are expected to meet and review the proposals they’ll receive in the coming days. There’s no guarantee that the company will receptive to proposals or that they’ll even be more to come after these ones, according to sources.

Strategic options

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Kohl’s has claimed it will continue to explore strategic options. The company recently defeated the attempt of an activist investor to overhaul the whole company’s board of directors. Company shares have dropped by around 17% this year, which has happened because of the pressure from wider market selloffs.

Kohl’s had previously garnered interest from Canada’s Hudson’s Bay as well. However, the parent of Saks has since decided to withdraw its proposals. These reports came from the Wall Street Journal around March.

Kohl’s Corp had been having a hard time even before the pandemic and there were many reasons why it started to listen to takeover bids. Merger activity had slowed down a bit during the pandemic but things seem to have picked up again.

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