Kohl’s activists: Take a buyout – or else


Menomonee Falls, Wis. – While Kohl’s is juggling multiple proposals for a possible buyout, an activist investor group set a date for it to make a move, offering sharp criticism of management’s strategic plans.

Macellum Advisors GP, one of the largest shareholders of Kohl’s Corporation with ownership of nearly 5% of the company’s outstanding common shares, this week announced it will offer its own slate of board members if Kohl’s fails to reach an agreement to sell itself to the highest bidder ahead of the company’s annual shareholder meeting. The retailer typically holds that meeting in May.

“We believe Kohl’s can be a source of tremendous value if it is finally unshackled from the incumbents and placed in the right hands – whether that be in the public or private market,” Macellum Advisors said.

Kohl’s said it has authorized Goldman Sachs to coordinate with select bidders “to assist with further due diligence so that they have the opportunity to refine and improve their proposals and include committed financing and binding documentation.” The retailer had rejected a pair of previous bids, asserting they did not fully reflect the company’s value in light of the company’s future growth and cash flow projections.

The company provided an update of its strategy and projects during its Investor Day earlier this month. Macellum was unimpressed.

“After months of build-up from the Kohl’s management team about its Investor Day, the company finally presented its three-year plan only to see the share price immediately crater 13%. It was clear to us from the negative market reaction that other investors were as bewildered and disappointed as we were,” the equity firm said this morning.

The three-year plan, Macellum added, would bring Kohl’s back to last year’s EBIT level of $1.7 billion –still below the $2.2 billion mark Kohl’s achieved within the last 10 years. The firm described current management’s plan as “high risk,” betting on increases in SG&A, capital expenditures and inventory simply to help reach its profitability targets.

“In our view, management’s plan is a non-starter and represents a feeble attempt to pull the wool over shareholders’ eyes,” it said.

Earlier, Kohl’s had made some concessions to Macellum. The board of director’s Finance Committee is now comprised entirely of independent directors, was formed pursuant to an earlier settlement with Macellum and includes one of Macellum’s 2021 designees.



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