Retailer with 59 Stores in Iowa and Wisconsin Fighting Takeover
The largest department store retailer in the U.S. is battling a hostile takeover of the company.
Kohl's is taking a lot of heat from Wall Street over slumping sales, which haven't recovered from the pandemic as quickly as hoped. After attacking Kohl's the last several months, a hedge fund is attempting a takeover with Kohl's current board of directors telling stockholders not to fall for their narrative. This isn't the first time the two have been involved in a battle.
Kohl's has a 13-member board of directors. In February, hedge fund Macellum nominated 10 new directors to that board. If they get approved, they would obviously have the numbers to take the company over.
Here's what's especially interesting, and perhaps even more concerning for Kohl's: In April of 2021, Kohl's reached a settlement with an activist group that included Macellum Advisors after the group nominated nine directors to Kohl's board. The settlement added two of the activists nominees to the Kohl's board, and added a 13th member.
In January of 2022, Macellum returned with a letter to Kohl's shareholders that said in part,
It was another lost year at Kohl's... The board appears unwilling to address the drivers of long-term underperformance... We plan to nominate a slate of director candidates if the status quo persists... If the Board is unwilling to pursue improvements, it should explore alternative strategies.
Yesterday, Kohl's sent their own letter to shareholders, asking them to re-elect the current board members. The letter came from the company's corporate office and said,
Macellum has offered virtually no new ideas; the few ideas they have presented are short-term focused and likely to destroy significant value... Macellum's campaign is riddled with contradictions... Macellum appears to be advocating for a quick sale of Kohl's at any price... Macellum continues to make false and disruptive statements about the Board's engagement with bidders... Macellum's criticisms of Kohl's are ill-informed... Macellum "day traded" Kohl's options, netting tens of millions in profits.
Despite efforts to curtail the board takeover by Macellum, Seeking Alpha confirms that Kohl's is entertaining offers for a sale. CNN has said there could be more than 20 possible buyers involved in the bidding process, while the New York Post believes Canada's HBC, the owner of Saks Fifth Avenue and Hudson's Bay Co., is the "likely front-runner."
Kohl's, based in Menomonee Falls, Wisconsin, has over 1100 locations in 49 states. There are 18 Iowa stores and 41 in Wisconsin. Kohl's stock closed Thursday, March 31 at $60.46 per share. It opened the year at $50.01.