Home Kohl’s Still Wary of Sale, Activist Investor
March 22, 2022

Kohl’s Still Wary of Sale, Activist Investor

In its ongoing fight with activist investor Macellum Advisors, Kohl’s Corp. has issued a statement saying it has engaged with firms interested in purchasing the company, but, in a separate letter, that it would oppose any replacement of its board in a proxy fight.

According to Kohl’s, its board of directors is reviewing multiple expressions of interest in acquiring the company. However, Kohl’s emphasized that the proposals received are non-binding and without committed financing. Kohl’s stated that its board has authorized Goldman Sachs to coordinate with select bidders who have expressed interest in Kohl’s regarding due diligence so that they can refine and improve their proposals and include committed financing and binding documentation.

Kohl’s maintained that its board, with experience in functions critical to evaluations, including mergers and acquisition, would be able to properly evaluate potential outcomes for the company.

In its letter to shareholders, Kohl’s asserted that the board and management team are creating significant value in the corporation. It insisted that the strategy proposed by the company in October 2020 is making substantial progress in transforming the business and positioning the company for long-term success. Total shareholder returns between October and January 21 2020 were up 146%, Kohl’s indicated, significantly outperforming the SPDR S&P Retail ETF and the S&P 500, the letter noted. 

It continues:

“Our growth strategy, which we have outlined in this letter, will allow us to drive sustainable and profitable growth and continue to return substantial capital to shareholders. We are already delivering results, as demonstrated by our 2021 performance that included a strong operating margin and record earnings per share.

To ensure we are maximizing shareholder value, your board is reviewing alternatives through an intentional and ongoing dialog with potential bidders. This process is robust and will be measured against the value creation potential of our compelling standalone plan. Regardless of the outcome of this process, we are excited about the many opportunities ahead for Kohl’s.

The Kohl’s board is well equipped to protect and grow the value of your investment. Your board is recently refreshed and has industry-leading experience in areas critical to our business, including e-commerce, retail, apparel, technology as well as M&A expertise, ensuring that our approach with potential bidders yields optimal results. Importantly, your board is committed to challenging and supporting the Kohl’s management team as we pursue our strategy, with the goal of delivering value for shareholders.

Unfortunately, one of our shareholders, Macellum Advisors GP, LLC, is seeking to take control of your board with a slate of less qualified nominees. Kohl’s is committed to engaging constructively with all our shareholders. However, we believe Macellum’s efforts to take control of Kohl’s are unjustified and unwarranted and highly concerning given Macellum’s intentions to engineer short-term financial actions that could damage the long-term future of the company. We urge you to discard any white proxy card you may receive from Macellum.

We strongly recommend that you vote the blue proxy card today for all 13 of Kohl’s highly qualified director nominees.”

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