Kohl’s (NYSE: KSS) shares surged 10% in early morning trading amid news that it had entered into exclusive negotiations with retail holding company Franchise Group, which has offered to buy the retailer for USD60 per share. The potential transaction would value Kohl’s at about USD8 Billion.
According to a person familiar with the matter, Franchise Group is working with Oak Street Real Estate Capital in order to finance the Agreement mostly through real estate. Nevertheless, a representative for the private equity real estate firm declined to comment.
“I can’t stress enough how resilient and nimble our management teams have been while staying true to our brands’ ethos and value propositions,” Franchise Group CEO Brian Kahn told analysts. “FRG’s diversification across various discretionary and non-discretionary products and services continued to serve us well,” Kahn added, noting the company’s intention to “further diversify and scale through strategic internal and external investment opportunities.”
The pending transaction is subject to approval from both of the companies’ board of directors, Kohl’s said in a press release. Furthermore, it said that it is not yet certain that they will even reach an agreement. Kohl’s made it clear that it will not be making any further comments until there is an agreement in place or the discussions have ended.
“Kohl’s Board of Directors remains focused on selecting the path that maximizes value for all Kohl’s shareholders,” the retailers’ statement read. “The Company will have no further comment until an agreement is reached or the discussions are terminated.”