Kohl’s Corp.
is in advanced talks to be sold in a deal that could value the department-store chain at roughly $8 billion, according to people familiar with the matter.
The Wisconsin company recently entered exclusive talks with retail holding company
Franchise Group Inc.,
the people said. The exclusivity period is expected to last for several weeks, so a deal isn’t imminent, and there still may not be one.
Franchise Group, which owns brands including Vitamin Shoppe, had offered around $60 a share for Kohl’s, The Wall Street Journal reported last week. It has been vying for the company in competition with private-equity firm Sycamore Partners, which put in a bid in the mid-$50s a share.
The stock closed at $42.12 Monday.
Shares in Kohl’s, which has said it was exploring strategic options, have fallen about 15% so far this year, buffeted by market turmoil and fears of an economic slowdown, a decline that has been mitigated by the possibility of a deal.
Weeks ago, Kohl’s had indicated to suitors that it believed the company was worth at least $70 a share, though difficult conditions for retailers and for financing leveraged buyouts might have reined in its price expectations.
Kohl’s, which had already been struggling, was further battered by the Covid-19 pandemic, which ate into sales and wiped out profit in 2020. Sales and profit rebounded in 2021, but by January 2022 the retailer’s stock was worth less than it was two decades ago.
Franchise Group acquires and manages mainly franchise companies.
While it has a market capitalization of just $1.5 billion, there are ways in which the firm could make the purchase more affordable, according to people familiar with the matter, such as by teaming with existing investors or by selling real estate.
—Suzanne Kapner contributed to this article.
Write to Cara Lombardo at cara.lombardo@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Kohl’s Corp.
is in advanced talks to be sold in a deal that could value the department-store chain at roughly $8 billion, according to people familiar with the matter.
The Wisconsin company recently entered exclusive talks with retail holding company
Franchise Group Inc.,
the people said. The exclusivity period is expected to last for several weeks, so a deal isn’t imminent, and there still may not be one.
Franchise Group, which owns brands including Vitamin Shoppe, had offered around $60 a share for Kohl’s, The Wall Street Journal reported last week. It has been vying for the company in competition with private-equity firm Sycamore Partners, which put in a bid in the mid-$50s a share.
The stock closed at $42.12 Monday.
Shares in Kohl’s, which has said it was exploring strategic options, have fallen about 15% so far this year, buffeted by market turmoil and fears of an economic slowdown, a decline that has been mitigated by the possibility of a deal.
Weeks ago, Kohl’s had indicated to suitors that it believed the company was worth at least $70 a share, though difficult conditions for retailers and for financing leveraged buyouts might have reined in its price expectations.
Kohl’s, which had already been struggling, was further battered by the Covid-19 pandemic, which ate into sales and wiped out profit in 2020. Sales and profit rebounded in 2021, but by January 2022 the retailer’s stock was worth less than it was two decades ago.
Franchise Group acquires and manages mainly franchise companies.
While it has a market capitalization of just $1.5 billion, there are ways in which the firm could make the purchase more affordable, according to people familiar with the matter, such as by teaming with existing investors or by selling real estate.
—Suzanne Kapner contributed to this article.
Write to Cara Lombardo at cara.lombardo@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8