The battle for Kohl’s (KSS) to sell rages on.
In one corner are activist investors Macellum Capital Management and Engine Capital. In the other, Kohl’s long underperforming management team.
Certainly, Kohl’s is not quietly entering the twilight of the private market.
The struggling retailer rejected two takeover offers in January, then adopted a poison pill to thwart perceived low offers. Earlier this month, Kohl’s held an investor day to try to spur management’s turnaround efforts.
The off-mall retailer said it aims to generate $2 billion in sales by opening 850 Sephora cosmetics stores inside its stores. The company added that it aims to open 100 small-format Kohl’s stores over the next four years.
In terms of long-term guidance, Kohl’s expects low-single-digit percentage sales growth and mid- to high-single digit EPS growth.
Kohl’s shares quickly tumbled 12% on its March 7 Investor Day.
Perhaps realizing he had made an execution error in dealing with credible deal offers, Kohl’s issued another press release.
“The Board of Directors has acknowledged receipt of multiple preliminary expressions of interest. Proposals received are non-binding and without committed funding,” Kohl’s said in a statement. Statement of March 21.
As this saga continues to unfold in the public markets, here’s what the two activist investors pushing to sell Kohl’s told Yahoo Finance Live this week.
Jonathan Duskin, CEO of Macellum Capital Management
Macellum leads a militant battle against Kohl’s leadership for more than a year. Duskin named an entirely new slate of members — including himself — to the company’s board ahead of its May 11 annual meeting.
“We’re going full steam ahead. It’s important, I think, that we keep the pressure on them. [Kohl’s] to ensure that they conduct this process in a full, fair and transparent manner. We are therefore continuing our strategy of managing a checklist [of the board]. And I really think the business has two ways. One, sell the company, and two, go to a contested election, and obviously we don’t think they’ll do very well there. We think the case for switching is pretty compelling, especially if they don’t accept one of those offers in the $70 range. That would be a significant premium over the unaffected unadjusted price of $46.”
A spokesperson for Kohl played down Duskin’s comments.
“Macellum is not a party to the board’s M&A process, yet continues to make uninformed statements. We encourage shareholders to refer to the company’s prior statements on the process,” the spokesperson told Yahoo Finance via email.
Arnaud Ajdler, managing partner of Engine Capital
The notorious activist firm shredded Kohl’s management in a scathing letter in december 2021.
“Kohl’s has been an interesting situation. We’ve been advocating for the company to start the process and sell themselves. They’re finally doing it,” Ajdler said. “We give an estimate of $75 per share for Kohl’s. We think that increases the value of the business appropriately. We know people today are talking about maybe $60 high or $70 low. So we’re not far off the $75 estimate I think shareholders better take the $60 high and the $70 low I think the company fell on the last analyst day a couple of years ago I think it was the market that told the company they didn’t like the company’s outlook.
Kohl’s responded to Ajdler’s latest comments.
“We believe our strategy will create significant value for shareholders, but as we have stated publicly on several occasions, our Board of Directors actively engages with potential bidders to ensure that we follow the path that offers maximum value for shareholders We are disappointed that Engine Capital continues to promote misleading comments about our company They cite Kohl’s one-day stock performance that matched a global market decline prompted by heightened war fears in Ukraine and a surge in global oil prices.We note that a direct peer was down more than In regards to our strategy going forward (as set out in our Q4 earnings and Investor Day) , we have received positive feedback from shareholders and analysts, and to underline this, since these communications, the estimate mo Yenne from analysts for Kohl’s 2022 EPS was up 10%,” a Kohl’s spokesperson told Yahoo Finance via email.