Simon Property Group and Brookfield Asset Management are offering to acquire retailer Kohl’s Corp. in a deal that would be worth more than $8.6 billion, according to a report in the New York Post.
Simon and Brookfield, which bought rival department-store chain JCPenney out of bankruptcy, have offered $68 a share, according to people with knowledge of the talks who the Post didn’t identify.
Shares of Kohl’s jumped as much as 4.5 percent on the news. Simon Property stock fell 1.5 percent and Brookfield shares fell 0.9 percent. A Kohl’s spokesperson and an outside spokesperson for JCPenney didn’t immediately return messages seeking comment.
Kohl’s has been under pressure from activist investors including Macellum Capital Management, which is seeking to take control of the company’s board. The Menomonee Falls, Wisconsin-based retailer has engaged Goldman Sachs Group Inc. to field offers, saying that the firm is authorised to coordinate with select bidders.
What Bloomberg Intelligence Says:
“We believe occupancy-preservation was an important driver behind Simon’s purchases of J.C. Penney and Forever 21. 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.”
— Lindsay Dutch, REITs and consumer hardlines analyst
Kohl’s said in March that Goldman had talked with more than 20 potential buyers. The retailer said in February that it had rejected takeover offers it had received as too low, including a $64-a-share offer from Acacia Research Corp., backed by hedge fund Starboard Value LP. The stock hasn’t traded above $65 in almost three years.
Learn more:
Why Activist Investors Are Targeting Department Stores
Hedge funds are urging Kohl’s and Macy’s to consider radical changes to how they operate as the retailers struggle to reverse decades of decline.
