Kohl’s in exclusive talk with Ohio-based franchise group for $8 billion deal

Kohl’s company has been into specific talks with Franchise Group retail holding company, which wants to purchase the store for $60 per share. Kohl’s would be valued at about $8 billion at such a price. According to the reports, both Franchise Group and Oak Street Real Estate Capital are collaborating to finance the transaction mainly through real estate assets. According to Kohl’s, the contract has yet to be approved by the companies’ boards of directors. However, there is no assurance that it will be finalized.

According to Kohl’s, the required amount of time will enable the Franchise Group and its funding partners to finish proper research and funding preparations.

The Franchise Group asserted that it intends to contribute approximately $1 billion in capital to the contract, which will be financially supported by raising the number of secured lending facilities to match. According to the Delaware, Ohio-based corporation, the major part of the financial support will be provided based on Kohl’s property assets.

Kohl’s merger saga
The saga of Kohl’s possible sale undertook around a half-year ago when the hedge fund Engine Capital directed the retailer to consider a sale or another deal to increase the price of the stock that was dealing at about $48.45 at the time.

Kohl’s informed in February that it had dismissed merger bids because they were undervalued and had hired bankers to pursue an additional interest in the company.

Kohl’s recently reported that its revenues for the quarter completed on April 30 dropped to $3.72 billion from $3.89 billion in 2021. In addition, the company reduced its income and profit predictions for the financial year, disheartening shareholders and casting doubts on a possible deal.

However, following the conclusion of normal trading on June 6, Kohl’s stocks increased by about 15% to near $48, which had lost 15% this year. They had ended 1.5% higher at $42.12, estimating the company at $5.4 billion.