“The board remains focused on running a robust and intentional review of strategic alternatives while executing our strategy to drive shareholder value.” Takeover averted for Kohl’s Corp.
Activist investors have wanted to sell company
Kohl’s Corp. shareholders voted overwhelmingly in favor of the company’s slate of candidates for the board of directors, effectively striking down a campaign by activist investors to take over the company — for now.
According to a preliminary vote count on Monday, all 13 Kohl’s candidates were reelected.
“We would like to thank our shareholders for their support throughout this proxy contest,” said Peter Boneparth, chairman of the board.
“While we have had differences with Macellum, this board is committed to serving the interests of all our shareholders. The board remains focused on running a robust and intentional review of strategic alternatives while executing our strategy to drive shareholder value. We appreciate the feedback we have received from our shareholders over the past several months and look forward to engaging with them further.”
The results are considered preliminary until final results are tabulated and certified by the independent inspector of elections and final certification is filed with the Securities and Exchange Commission.
The board members are Michael J. Bender, Peter Boneparth, Yael Cosset, Christine Day, Chuck Floyd, Kohl’s CEO Michelle Gass, Margaret Jenkins, Thomas Kingsbury, Robbin Mitchell, Jonas O. Prising, John E. Schlifske, Adrianne T. Shapira and Stephanie Streeter
In one of the largest proxy fights in the nation, shareholders gathered virtually and cast their votes for who they trust to lead the company.
Macellum Capital Management has been pushing for regime and board change since January and nominated 10 people to be on the board.
Kohl’s responded to Macellum’s candidates by adopting a shareholder rights plan, often known as a “poison pill,” to prevent an investor from getting more than 10% of the company without a vote from the board.
Although the vote went against Macellum, it’s possible the fight is not over.
In 2021, Macellum negotiated with Kohl’s and was able to get three board members elected by shareholders, so it is possible the activist investor could try again to get board control.
After the vote, Jonathan Duskin, managing partner for Macellum, released a statement saying he and the
chairman of the board
firm respect the outcome of the vote but the board and the company “should not misconstrue today’s result as a ringing endorsement of its preferred operating plan, which has been met with considerable market skepticism.”
“It’s unfortunate that many investors voting for the incumbents seem to have bought into the narrative that change in the boardroom would be too disruptive during a sale process and possibly delay or jeopardize a nearterm transaction,” Duskin said.
“We contend this vote was a shareholder referendum for a sale, and we look forward to learning of an announced transaction on the quickest possible horizon. However, if Kohl’s is not sold, all directors need to be held accountable for any value that is not realized.”
Kohl’s evaluating potential bids
While much of Wall Street watched the fight between the company and activist investors, Kohl’s has been evaluating bids to buy the company.
It’s been reported that Kohl’s has received a $8.6 billion joint offer from shopping-mall giant Simon Property and Canada-based Brookfield Asset Management, which together bought JC Penney when it filed for bankruptcy in 2020.
On April 14, Franchise Group, owner of The Vitamin Shoppe, made a $9 billion offer to buy Kohl’s.
In March, Canadian retailer Hudson Bay was reported to be interested in Kohl’s.
In late January, an affiliate of activist hedge fund Starboard Value LP offered $9 billion to buy the Menomonee Falls-based department store chain.
As the stock market overall continues to be in decline, it’s unclear if and at what number Kohl’s will find a buyer.
The company is continuing with its strategy to heavily invest in its partnership with Sephora by adding hundreds of new Sephora at Kohl’s stores by the end of the year.
Kohl’s stock price closed at $46.65, down roughly 5.5% as the market overall continues to be in decline.