Kohl’s, the largest department store chain in the U.S., has backed out of selling its business to Franchise Group, the company announced Friday.
The retailer blamed extreme market volatility as a reason for ending its bid and added that it has a healthy balance sheet, which means it can go at it alone.
“Despite a concerted effort on both sides, the current financing and retail environment created significant obstacles to reaching an acceptable and fully executable agreement,” said Peter Boneparth, chair of the company’s board, in a press release. Boneparth added that the company “remains open to all opportunities to maximize value for shareholders.”
Franchise Group initially offered Kohl’s $60 per share, significantly higher than yesterday’s $36 a share closing price. The company, however, lowered its offer in recent days due to ongoing economic turmoil.
Neil Saunders, who serves as the managing director of GlobalData, noted that the sunken deal is “no great surprise.”
“Kohl’s management never really wanted to sell the business, favoring instead to follow their own strategic plans,” Saunders wrote in an analyst note. “They entertained Franchise Group as it was the least worst option and would have kept the company intact and some of the current management in place, but they will not likely mourn the termination of talks.”
The news sent Kohl’s stock tumbling by 15% in premarket trading, according to CNN.