Currently, Kohl’s Corp. (NYSE: KSS) is in advanced negotiations to be sold in a transaction valued at over $8 billion.
The reported earlier this week that the Wisconsin-based business has begun exclusive negotiations with retail holding company Franchise Group Inc. (NASDAQ: FRG) The corporation said that the exclusivity period would run for three weeks, but that a deal is not assured.
Confirmation of a previous story by Franchise Group, which owns brands including Vitamin Shoppe, claimed it has made an offer of $60 a share for Kohl’s Corp. A private-equity group known as Sycamore Partners made a proposal in the mid-$50s per share, sources familiar with the situation have stated.
Stocks soared 13% after-hours to $42.12 as a result of the good news.
A 15% drop in Kohl’s stock this year has been offset by the chance of a transaction, which has been buffeted by market instability and worries of a downturn in the economy.
However, Kohl’s had previously said that it felt its stock was worth at least $70 per share, even if the current retail environment and the difficulty of securing financing for leveraged buyouts may have lowered that figure.
The Covid-19 epidemic, which had already taken a toll on Kohl’s sales and profits in 2020, exacerbated the company’s woes. In 2021, sales and profit rose, but the retailer’s stock was worth less than it had been two decades earlier by January 2022.
The majority of the firms that the Franchise Group purchases and operates are franchises.
According to those acquainted with the subject, the company has a market value of barely $1.5 billion, but there are methods in which it may make the acquisition more reasonable, such as teaming up with current investors or selling real estate.