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‘Multiple’ Kohl’s Contenders Could Sweeten the Pot

“Multiple” parties have thrown their hat in the ring for Kohl’s, the retailer confirmed Monday.

The preliminary, non-binding proposals don’t make any firm commitments for financing. Kohl’s financial advisor Goldman Sachs will work “refine and improve” some bidders’ proposals and find out more on the financial front.

Hudson’s Bay Co. last week confirmed plans to put a package together for Kohl’s while private equity firm Sycamore Partners in January indicated its interest in the retailer before Goldman came aboard. It wasn’t immediately clear if Acacia Research, backed by activist hedge fund Starboard Value, which was behind a $9 billion offer in January, would be willing to go higher than $64 a share. New offers are said to be closer to the $70 range, sources said, and Cowen analyst Oliver Chen believes the retailer could fetch between $75 to $85 per share. Former retail analyst Walter Loeb, who now has his own consultancy, said $85 is entirely likely if Kohl’s leadership makes good on its game plan. Kohl’s share are currently trading in the $62 range.

Separately, the retailer asked eligible shareholders to vote for all 13 Kohl’s director nominees at May’s annual meeting, reminding them that shareholder returns since it instituted its new strategy in October 2020 have reached “146 percent through Jan. 21, 2022, significantly outperforming the SPDR S&P Retail ETF and the S&P 500.”

Kohl’s also accused Macellum Advisors of once again “seeking to take control of your board with a slate of less qualified nominees” despite the activist investor’s antics last year resulting in a board refresh. It claimed Macellum plans to “engineer short-term financial actions that could damage the long-term future of the company” and urged shareholders not to vote for the investor’s board nominees.

Activist investors have been pushing Kohl’s for action to maximize shareholder value. Engine Capital Management is eyeing a competitive sale process, with particular interest in Kohl’s roughly $7 billion in real estate assets. It would also be happy if Kohl’s broke up into two separate businesses for stores and for e-commerce.