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Kohl's shelves sale as market turmoil ends months of negotiations

Stock Markets Jul 01, 2022 09:36AM ET
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© Reuters. The Kohl’s label is seen on a shopping cart in a Kohl’s department store in the Brooklyn borough of New York, U.S., January 25, 2022. REUTERS/Brendan McDermid/Files

(Reuters) - After hundreds of hours of negotiations with dozens of interested parted, Kohl's Corp (N:KSS) has shelved its plans to sell itself blaming sinking markets and difficult financing conditions.

Here's a timeline of the major events leading up to the company announcing it had abandoned talks to sell itself to Vitamin Shoppe owner Franchise Group (NASDAQ:FRG) on Friday:

DATE EVENT

March 2021 Activist investor Macellum seeks to

replace nine of Kohl's directors in a

campaign conducted with hedge funds

Ancora Holdings Inc and Legion Partners

Asset Management LLC.

April 14, 2021 Kohl's settles with the activist group,

agrees to add three new directors to

its board.

Dec. 6, 2021 Hedge fund Engine Capital LP pushes

Kohl's to consider selling itself or

separating its e-commerce division to

improve its lagging stock price.

Jan. 18, 2022 Macellum urges Kohl's to explore

strategic alternatives including a

sale, adding it plans to nominate a

slate of directors to the board.

Jan. 18 Acacia Research, backed by activist

investor Starboard Value, contacts

Kohl's to explore bid, offering to pay

$64 per share.

Jan. 23 Private equity firm Sycamore Partners

prepares to make a bid, saying it is

willing to pay at least $65 per share

for the retailer.

Jan. 25 Macellum presses Kohl's for at least

one board seat and a public statement

that it is reviewing strategic

alternatives.

Feb. 4 Kohl's adopts a shareholder rights

plan, rejects the buyout offers as

undervalued.

Feb. 8 Goldman Sachs (NYSE:GS), on behalf of Kohl's,

begins talks with other potential

bidders while continuing to engage with

parties who showed initial interest

Feb. 10 Macellum nominates 10 directors to

Kohl's 14-member board, arguing it has

not done enough to improve its business

and that it should sell itself.

March 7 Kohl's says it had engaged with over 20

parties regarding strategic

alternatives and signed confidentiality

agreements with some.

Goldman Sachs sends a process letter

March 8 describing the timeline and procedures

for submitting a binding proposal due

by March 16

Three parties, including Canadian

March 16 department store chain Hudson (NYSE:HUD)'s Bay Co,

express interest in buying Kohl's with

indicated values of between $64 and $70

per share

April 12 Franchise Group enters the race with a

$9 billion indicative offer, saying it

would be willing to pay $69 per share.

April 25 J.C. Penney owners Simon Property Group (NYSE:SPG)

Inc and Brookfield Asset Management Inc

offer $68 a share for Kohl's, the New

York Post reports, citing sources close

to the talks. (https://

April 29 Kohl's says Goldman Sachs had engaged

with over 25 interested parties

May 11 Kohl's wins proxy battle against

Macellum, with investors rejecting the

hedge fund's efforts to replace 10

board directors.

Several large retailers, including

Week of May 16 Walmart (NYSE:WMT), Target (NYSE:TGT) and Kohl’s warned of

profits being hurt by surging

inflation, raising concerns about

retail industry trends and leading to

significant declines in retailer stock

prices.

Reuters reports bidders were preparing

to revise their offers down from the

May 25 indicative bids submitted earlier,

reflecting the market downturn and the

company's struggling business.

One party withdraws from bidding

process, citing challenging financing

markets.

Franchise enters into a three-week-long

June 6 exclusive discussion window with Kohl's

over a potential sale of the retailer

at $60 per share.

Kohl's and Franchise in talks to retain

June 21 the department store chain's top

management team, including CEO Michelle

Gass, Reuters reports.

Franchise Group provides a revised

June 27 proposal to acquire the company at $53

per share.

Kohl's board, citing current financing

June 30 and retail environment, unanimously

determines to shelve sale process.

Kohl's announces it has abandoned talks

to sell itself to Franchise Group,

July 1 blaming a downturn in market

conditions.

Sources: Company press releases and regulatory filings, Reuters' sources

Kohl's shelves sale as market turmoil ends months of negotiations
 

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