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Kohl's bags buyout offers from Sycamore and Franchise Group

Richard Collings
Jun 3, 2022
The Kohl's name is spelled out on the side of a building in brown lettering alongside an arrow pointing to the right.
Photo: Justin Sullivan/Getty Images

Kohl's has received two buyout offers, one from private equity firm Sycamore Partners and the other from retail franchisor Franchise Group, the Wall Street Journal reports, and Axios has confirmed.

Why it matters: As the auction process nears its end stage, it really comes down to whether Kohl's will accept a price below the $64-per-share bid from Starboard Value-backed Acacia Research it rejected earlier this year as too low.

Of note: The bid from Sycamore was said to be in the mid-$50-per-share range, while Franchise Group offered around $60.

  • The company's stock is up about 2% Friday morning.

Details: The offers from Sycamore and Franchise Group, which is the parent of brands such as The Vitamin Shoppe and Sylvan Learning, are still a premium to Kohl's stock price on Jan. 21 of nearly $47 per share, the day the bid from Acacia was reported.

  • When the retailer later rejected Acacia as a suitor, it was in a stronger bargaining position.
  • In the aftermath of poor first-quarter earnings results comments by Kohl's CEO Michelle Gass on the company's sale prospects struck a positive note.

Our thought bubble: The conundrum for Kohl's is that despite the strong recovery of and demand for apparel coming out of the pandemic, its performance has left investors unimpressed.

  • Competitor Macy's, for example, beat expectations and raised its outlook.
  • Given some of the challenges ahead, the road as an independent retailer is not likely to get any smoother for the chain.
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