Kohl’s Engages Goldman Sachs to Review Acquisition Offers

March 24, 2022

Kohl’s Engages Goldman Sachs to Review Acquisition Offers

On Monday, Kohl’s Corporation, based in Menomonee Falls, Wisconsin, issued a press release confirming that the company has received a number of expressions of interest in acquiring the company, and announcing that the department store chain’s Board of Directors has hired the investment banking firm, Goldman Sachs, to assist them in assessing “multiple preliminary indications of interest.” Such indications are described as “non-binding and without committed financing.”

Goldman Sachs, headquartered in New York City, is a multinational firm that offers investment banking services, securities underwriting, asset management, investment management, and prime brokerage (bundled services for hedge fund clients).

It appears that Goldman Sachs’s initial assignment will be to help the retail chain’s Board sift through initial, non-binding proposals from suitors, with the objective of inviting qualified parties to conduct further due diligence of Kohl’s financial results, current condition and future prospects, in order to refine their proposals and firm up their plans for financing a takeover.

Kohl’s is what’s known as an omnichannel retailer, meaning it is positioned to reach and engage consumers across multiple channels and device types to provide consumers a seamless shopping experience, regardless of whether they are shopping in a brick-and-mortar store (the company operates more than 1,100 retail stores across 49 states), shopping online at kohls.com, shopping from a desktop computer, or using the Kohl’s app installed on a mobile device, such as a cell phone or a tablet.

Kohl's positions itself as offering “amazing national and exclusive brands at incredible savings for families nationwide,” and claims its vision is to be “the most trusted retailer of choice for the active and casual lifestyle.”

The Kohl’s Board has been feeling heat since December, when activist shareholder, Engine Capital, first pressured them to consider either splitting off their online operation or selling the entire business in order to boost the company’s share price.

In early February, Kohl’s Board came under further pressure from other activist shareholders when the hedge fund Macellum Advisors, which owns roughly 5% of Kohl’s stock, urged the company to sell itself, arguing that firm’s real estate holdings are worth more than the retail enterprise as a whole. In response, the Board’s Finance Committee, comprised only of independent directors, announced it would lead a review of expressions of interest.

Speculation as to parties likely interested in acquiring the chain has centered around the Canadian department store chain, Hudson’s Bay Co., and certain private-equity firms.

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