Kohl's (NYSE: KSS) shares jumped on Monday, January 24, after the department store chain announced that it had been approached by potential buyers. Private equity firm Sycamore Partners, as well as activist hedge fund-backed Acacia Research group, have both made bids on the company.
Kohl's Corp. confirmed the offers after they had been reported by the media. While details of both offers are limited, Acacia reportedly bid around $9 billion, or $64 per share. At the time of Acacia's offer on Friday, Jan. 21, its bid was about 37% higher than Kohl's closing price. Sycamore reportedly offered $65 per share. Following the confirmation from the company that it had received offers, Kohl's shares spiked 32%, from $15.29 to $62.18.
Both of the offers came after activist hedge fund Macellum Advisors sent a letter to Kohl's recommending that the company consider selling or taking other immediate action to increase its share price. The fund also intends to nominate a slate of potential director candidates if sufficient action is not taken to improve the chain's financial standing.
In April of last year, a group of activists hedge funds including Macellum successfully pressed Kohl's into adding three independent members to its board of directors. The fund backing Acacia Research, Starboard Value LP, is not cited as a member of that group.
These activist investor groups have been criticizing Kohl's heavily for some time for reportedly not giving shareholders enough return on their investments. Recent partnerships with Sephora (OTC: LVMUY) and Amazon (NASDAQ: AMZN) have helped to boost in-store traffic, according to the company.
Sephora locations have been added to 200 Kohl's stores with plans to add another 400 locations in 2022. Amazon, on the other hand, is partnering with Kohl's to give customers a physical place to take their returns, free of charge and without having to re-package and ship the item themselves. Once it's gotten the Amazon buyers into the store, Kohl's hopes to convert them to loyal Kohl's customers.
Kohl's jump in share price was accompanied by more modest gains for Macy's (NYSE: M), Dillards (NYSE: DDS), and Nordstrom (NYSE: JWN), with the department store chains seeing boosts of 18%, 14.7%, and 13% respectively. While this follows a trend of growth for both Macy's and Dillard's, Nordstrom has been on the decline, seeing a dip of 30.3% over the past six months.