JCPenney’s Parent Company Makes $8.6B Bid For Kohl’s

Words by Retail Bum

JCPenney's Parent Company Makes $8.6B Bid For Kohl's
JCPenney's Parent Company Makes $8.6B Bid For Kohl's
Brookfield Asset Management and Simon Property Group are seeking to acquire Kohl’s for more than $8.6 billion.

The two companies, which together acquired retailer JCPenney and Forever 21, are offering $68 a share for Kohl’s.

If successful, the deal would mark yet another acquisition of a struggling retailer by Simon Property Group. However, it will be markedly different from other acquisitions the mall giant has pursued over the past two years.

“We believe occupancy-preservation was an important driver behind Simon’s purchases of JCPenney and Forever 21,” said Lindsay Dutch, REITs and consumer hardlines analyst. “That’s not a factor here because Kohl’s is mostly an off-mall retailer and isn’t among Simon’s largest tenants. Simon also has yet to show tangible results from its turnaround efforts with Penney.”

The retailer began entertaining offers from potential buyers in response to pressure from activist investor Macellum Capital Management, which is seeking to take control of the company. Earlier this month, Kohl’s asked its shareholders to reject Mycelium’s bid to add an “unqualified slate” of directors to its board.

“Macellum is promoting an ever-changing narrative, misinformed claims, and value-destructive proposals, all of which reveal a reckless and short-term approach that is not in the interest of driving long-term, sustainable value,” the company said in a letter.

As of March, the company had received interest from more than 20 buyers, including a $64 per share offer from Acacia Research Corp. Kohl’s rejected all bids, saying they were too low.

Kohl’s stock jumped 4.5% after the news broke, while stock values of Simon Property Group and Brookfield fell by 1.5% and 0.9%, respectively.

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