Report: Sycamore, Acacia Make Acquisition Bids for Kohl’s as it Faces Investor Pressure

Kohl’s has confirmed that at least two suitors have made acquisition offers. Sycamore Partners is reportedly willing to pay $65 per share, or over $9 billion in total for the company, people familiar with the matter told CNBC. The other offer, at $64 per share, reportedly came from Acacia Research, with backing from Starboard Value.

The sources also said that Acacia and Starboard would likely partner with Oak Street Real Estate Capital to sell Kohl’s real estate. However, Kohl’s has previously opposed similar sale-leaseback deals.

Kohl’s has been facing pressure from activist investors for some time, including a push to add nine independent candidates to its Board of Directors in February 2021 led by Macellum Advisors GP, Ancora Holdings, Legion Partners Asset Management and 4010 Capital. Kohl’s rejected both the initial push and a revised slate of five candidates, but ultimately added two of the nominees to the board.

In December 2021, Engine Capital called on the retailer to separate its digital and brick-and-mortar businesses. The activist investor said that it believes the standalone business would be “conservatively valued at $12.4 billion or more,” while Kohl’s as a whole is currently valued at about $7.3 billion.


Macellum Advisors issued a letter on Jan. 18, 2022 calling on the retailer to “address the drivers of long-term underperformance.” The activist investor stated that it supports the pursuit of strategic alternatives and that it will submit another slate of independent directors “if the status quo persists.”

Kohl’s has responded to recent pressures by noting that its current strategy is working, resulting in a 16% sales increase during Q3 2021. “We continue to be encouraged with how the channels reinforce each other together, delivering an exceptional customer experience through a seamless omnichannel integration of offerings and conveniences,” said Michelle Gass, CEO of Kohl’s on a call with investors in November 2021.

One of the key elements of the retailer’s recent success is the launch of in-store Sephora locations. Gass stated that the first 200 shops are “driving extraordinary growth in our beauty business,” with highlights including:

  • Bringing an incremental mid-single-digit overall sales lift to the stores where they are located;
  • Attracting younger and more diverse customers, with 25% of Sephora at Kohl’s shoppers completely new to Kohl’s; and
  • Driving sales in other categories, with approximately 50% of Sephora customers making at least one other purchase from elsewhere in the store.

It remains to be seen whether Kohl’s will stay the course or pursue the acquisition offers. Kohl’s stated that its Board of Directors “will determine the course of action that it believes is in the best interests of the company and its shareholders” in a statement, but has declined further comment.

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