Kohl’s Shares Surge as Retailer Gets Takeover Offers

Shares of department store chain Kohl’s were soaring in Monday’s trading session after Wall Street learned that the retailer has been given takeover offers from suitors that include Sycamore.
Shares gained 36% as news emerged that the company has at least two suitors interested in buying the chain.

According to sources familiar with the situation who spoke to CNBC, Sycamore is willing to pay at least $65 a share, which would mean a 39% premium to the stock’s last closing price of $46.84.

It was just a couple of days ago that Acacia Research, backed by activist investment firm Starboard Value, offered to pay $64 a share for Kohl’s, said the sources.

The sources requested anonymity because the talks are private. The unidentified people told CNBC that Acacia and Starboard would likely partner with Oak Street Real Estate Capital to try and sell off Kohl’s real estate to raise more money. In the past, however, Kohl’s has opposed such a sale-leaseback deal.

The sources also told CNBC that Acacia and Starboard would likely partner with Oak Street Real Estate Capital to try and sell off Kohl’s real estate to raise more money.

Kohl’s confirmed in a statement that it has received letters expressing interest in acquiring the business. The company said its board of directors “will determine the course of action that it believes is in the best interests of the company and its shareholders.” Kohl’s said it doesn’t plan to further comment publicly on the letters.

We think Kohl’s is worth $75 a share or more, remarked Cowen’s Oliver Chen.

Credit Suisse analyst Michael Binetti said he expects that Kohl’s could warrant a per-share value of between $70 and $80, based on the valuation of its retail operations.

“We do think there’s some merit to Kohl’s embracing a slightly more aggressive real estate strategy to bolster shareholder returns today,” wrote Binetti, in a note to clients.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.