Kohl’s Rejects Acquisition Offers, Creates Plan to Protect Against Hostile Takeovers


Kohl’s Board of Directors has rejected the acquisition offers from Sycamore Partners and Acacia Research, stating that “the valuations indicated in the current expressions of interest which it has received do not adequately reflect the Company’s value in light of its future growth and cash flow generation.” Additionally, the retailer has adopted a “poison pill” shareholder rights plan to prevent hostile takeovers.

it’s likely that the plan is an effort to keep the company whole despite pressure from investors such as Engine Capital, which has been pushing Kohl’s to spin off its ecommerce business into a standalone entity. Engine Capital stated that the online assets alone could be “conservatively valued at $12.4 billion or more” in Dec. 2021, when Kohl’s combined operation was valued at about $7.3 billion.

Kohl’s board reviewed the Sycamore and Acacia offers with its independent financial advisors before coming to its decision. The board also reiterated that it is “committed to maximizing the long-term value of the company,” and pledged to “review and pursue opportunities that it believes would credibly lead to value consistent with its performance and future opportunities.”

“We have a high degree of confidence in Kohl’s transformational strategy, and we expect that its continued execution will result in significant value creation,” said Frank Sica, Chairman of the Kohl’s Board of Directors in a statement. “The board is committed to acting in the best interest of shareholders and will continue to closely evaluate any opportunities to create value.”


All reviews of acquisition offers will be handled by the board’s Finance Committee, which was formed in a 2021 settlement agreement with Macellum Advisors and other shareholders. The group is comprised exclusively of independent directors and engages with outside financial advisors including Goldman Sachs and PJT Partners.

Kohl’s also has adopted a limited-duration shareholder rights plan, effective immediately and scheduled to expire on Feb. 2, 2023, to prevent a hostile takeover. The retailers stated that the “rights plan has been adopted in order to ensure that the Board of Directors can conduct an orderly review of expressions of interest, including potential further engagement with interested parties” and that it “does not preclude the board from considering an offer that recognizes the value of the company.”

The shareholder plan activates when a person or group acquires beneficial ownership of 10% or more, or 20% or more for passive institutional investors, of Kohl’s outstanding common stock. At that point, existing shareholders will have the option purchase additional shares of the company’s common stock at a 50% discount from the then-current exercise price. The plan also provides the ability for shareholders to call a special meeting to exempt a “qualifying offer” from this option.

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