Kohl’s nominees greenlit in advisory firm’s report
Glass Lewis, a company that provides shareholders advice about how to vote on key issues, recommended Tuesday that Kohl’s shareholders approve all 13 of the company’s board of director nominees.
The report comes a week before a key shareholders meeting in which the company management faces an aggressive challenge from dissident shareholders Macellum Capital Management which has nominated its own board slate.
Kohl’s also has received multiple offers to buy the company. The company is currently evaluating its options.
“We believe shareholders would be best served supporting the current board and its efforts to enhance shareholder value, whether that takes the form of continued oversight of the existing standalone strategy or seeing through the ongoing sale process,” said a portion of the Glass Lewis report released by Kohl’s.
“In our view, the company’s board currently comprises a reasonably wellrounded mix of qualified directors who have complementary experience, qualifications and backgrounds across various relevant industries and disciplines.”
The Milwaukee Journal Sentinel has requested a copy of the report from Glass Lewis but has yet to receive a response.
The report comes days after Institutional Shareholder Services Inc., another proxy advisory firm, delivered a partial victory to Macellum by endorsing two of its 10 candidates.
For months Kohl’s has been locked in a bitter fight with Macellum which owns nearly 5% of the company and is actively seeking to take control of the board.
In response to the report, Kohl’s stated:
“Kohl’s is pleased with the support from Glass Lewis of Kohl’s strong board. We’re also pleased with the acknowledgement that Macellum’s proposals would not add value and that the change to the board Macellum is seeking is unwarranted.”
On May 11, Kohl’s shareholders are expected to choose between the two slates of candidates. The outcome could impact the future of the company and thousands of jobs across the state and country.
According to Kohl’s, the Glass Lewis report also stated that Macellum’s proposed strategy of selling Kohl’s property and leasing it back could “destroy significant value.”
“Simply because a private equity buyer may be considering a sale-leaseback to partially finance a leveraged buyout does not necessarily mean that a sale-leaseback would be a prudent move for the company on a standalone basis.
“We also question how potential buyers of the company would react to the company pursuing a significant saleleaseback, as such a move could result in the loss of a potential deal financing source in the context of a takeover proposal. … To the best of our knowledge, the dissident (Macellum) has not highlighted any successful precedents where a retailer has undertaken saleleasebacks on the scale the Dissident has proposed here.”
Another idea Macellum has pitched to increase revenue for Kohl’s is to spinoff its e-commerce website into its own business.