Hudson’s Bay Trying to Add Kohl’s to Retail Platform

Canadian department store chain Hudson’s Bay Co. is trying to acquire Kohl’s, a source familiar with the situation told Reuters for its report Wednesday (March 16).

Kohl’s shares neared $63 on Wednesday, which would value the company at $8.76 billion. The Wall Street Journal reported that private equity firm Sycamore Partners and Hudson’s Bay are planning to make bids in “the high $60s per share” for Kohl’s, which has asked for bids by Wednesday.

Kohl’s believes it’s worth more than $70 per share, according to one of the sources.

Sycamore Partners declined to comment on the situation. Axios had the first report about Hudson’s Bay considering making a bid for Kohl’s, which rejected two buyout offers valuing it at between $64 and $65 per share from Sycamore and Starboard Value-backed Acacia Research.

Kohl’s officials said this month that investment bank Goldman Sachs spent January, February and March talking to more than 20 parties about its next steps, adding it had provided a few of them access to more financial data.

“The board will measure potential bids against a compelling standalone plan,” Kohl’s said in an emailed response to Reuters on Wednesday, adding that the process was “robust and ongoing.”

In December, activist investors urged Kohl’s, the second-largest U.S. department store chain, to either sell itself outright or consider a spin-off of its eCommerce division in a bid to boost its stock price.

Related: Kohl’s Urged to Sell Company or Spin off eCommerce Business

Additionally, New York-based hedge fund Engine Capital called on Kohl’s to either sell the company or separate its eCommerce business in response to its failing stock price.

Engine, which owns around 1% of the $7.3 billion retailer, pointed to its underperformance compared to the S&P 500 and other retailers for the past few years, which is approximately where that stock was 10 years ago.

Kohl’s online sales revenue, projected at about $6.2 billion, would value the company’s digital business alone at $12.4 billion, according to Engine.