U.S. department store operator Kohl’s Corp has approached At Home Group Inc to express interest in acquiring the U.S. home decor retail chain, people familiar with the matter said on Wednesday.
A deal would help Kohl’s expand its customer base, which focuses on women’s, men’s and children’s clothing, and boost its presence in the home goods category, which has traditionally accounted for a small part of its business.
Kohl’s recently started conversations with At Home Group to explore a deal, the sources said. At Home Group has been exploring a sale for the last three months, and is already in advanced deal negotiations with private equity firms, including Hellman & Friedman LLC, the sources added.
There is no certainty that an offer from Kohl’s will materialize as a result of the preliminary discussions, and At Home Group may revert to trying to sell itself to a buyout firm, the sources added, asking not to be identified because the matter is confidential.
Kohl’s and At Home Group did not immediately respond to requests for comment, while Hellman & Friedman declined to comment.
Shares of At Home Group rose as much as 16 percent on the news to $23.84, giving the company a market value of more than $1.5 billion.
At Home Group operates 188 stores in 38 states, selling everything from furniture, mirrors, rugs, art and housewares to tabletop, patio and seasonal décor.
Private equity firms AEA Investors LP and Starr Investment Holdings LLC floated the company in the stock market in 2016. They own 16.6 percent and 9.9 percent of At Home Group, respectively.
Reuters reported in April that the company was exploring a sale.
Kohl’s has been investing in several new partnerships to bring in more shoppers. It signed a deal with Amazon.com Inc to display its Echo dot speakers and Kindle e-readers in its stores, while it partnered with millennial-focused Popsugar to launch a new line of clothes.
Earlier this year, Kohl’s teamed up with Weight Watchers to promote a healthy lifestyle through workshops and events at its Chicago store, which is expected to push sales of kitchenware and cookware.
Kohl’s has more than 1,100 stores in 49 U.S. states, and has a market capitalization of $10.5 billion. Kohl’s shares were down 1.8 percent at $64.30 in afternoon trading.