Kohl’s investor Macellum seeks involvement in possible sale review
An activist hedge fund investor that owns nearly 5% of Kohl’s Corp. wants to be closely involved in a possible sale of the company.
Macellum Advisors on Tuesday made public a letter it sent to the Menomonee Falls-based department store chain’s board of directors.
It asks the board to commit to “a robust process to review strategic alternatives” in light of Kohl’s receiving two competing purchase offers.
Macellum wants Kohl’s to form a special committee of independent directors to oversee the review, retain advisors and solicit proposals from all interested bidders.
The investor also wants a Macellum representative to join the board and lead the special committee to provide credibility, the statement said.
A Kohl’s representative didn’t immediately respond to a request for comment.
New York-based Macellum has been publicly criticizing Kohl’s management since February 2021, saying the company has underperformed.
Macellum last year filed a proxy statement as part of a campaign to take over nine seats on the company’s 12person board of directors.
Macellum in April dropped that effort after the company agreed to expand its board to 15 members — including two directors nominated by Macellum.
Macellum renewed its public criticism of Kohl’s with a statement issued Jan. 18, just days before reports surfaced of the purchase offers.
A group led by Acacia Research Corp., which is controlled by activist hedge fund Starboard Value, is offering $9 billion to buy Kohl’s. That translates to $64 a share, a 37% premium to the $46.84 closing price on Friday.
Meanwhile, private equity retail specialist Sycamore Partners is in preliminary talks to buy Kohl’s for at least $65 a share, according to published reports.
Kohl’s on Monday confirmed it has received letters expressing interest in acquiring the company.
A “credible and open process” to evaluate a possible sale is needed, said the letter from Jonathan Duskin, managing partner at Macellum Capital Management, a Macellum Advisors affiliate.
“We are eager to lend our expertise and support this process if the Board will extend us an invitation without onerous conditions and terms,” Duskin wrote.
“Candidly, we do not have faith in the current Board to run this process on its own, nor do we believe the Board is capable of objectively evaluating possible bids relative to its historically overly optimistic assessments of management’s standalone plans,” he said.
Kohl’s shares closed at $62.27 Tuesday, down $1.44.