Is Kohl's Stock Delisting? Retailer Mulls Buyout Offers

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Mar. 22 2022, Published 11:53 a.m. ET

U.S. retail chain Kohl’s Corp. (KSS) announced on March 21 that it’s mulling offers from prospective buyers. Kohl’s has received criticism in the last few years as its earnings continue to plummet compared to thriving competitors. From unpopular leadership to battered sales, KSS stock has also taken a hit. Will Kohl’s stock delist from the New York Stock Exchange on a sale or will the retailer maintain its status as a publicly-traded company?

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Here’s what we know about the state of Kohl’s today, including who might be bidding and whether KSS stock will stay on the market.

Kohl’s has received multiple buyout offers.

Kohl’s announced in a press release that it’s mulling buyout offers from numerous companies. The company clarified, “The proposals received are non-binding and without committed financing.”

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One of the bids comes from fellow retailer Hudson’s Bay Co., according to sources. Led by HBC, which trades in Canada on the Toronto Stock Exchange using an eponymous ticker, Hudson’s Bay Co. is a Canadian department store operator.

Another bid stems from private equity firm Sycamore. Reports suggest bidders are valuing the company around $9 billion. As of mid-day on March 22, Kohl’s stock has an $8.1 billion market capitalization.

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If Kohl’s sells, KSS stock could potentially delist.

kohls
Source: Kohl's

Michelle Gass, Kohl’s CEO

Kohl’s is definitely interested in selling to the right buyer. Depending on who buys Kohl’s and what the terms of the deal entail, it’s possible that KSS stock could delist. If an already public company buys Kohl’s, the new parent company’s stock could absorb KSS. Alternatively, if a private equity firm buys Kohl’s, that ticker could simply delist.

What happens if KSS stock delists?

If KSS stock does delist, shareholders will likely receive cash liquidation at a premium. A previous bidder valued Kohl’s at $64 per share, but the company dismissed the offer and said it was too low. Any subsequent bidder will likely come in higher, which means a delisting would give shareholders a greater premium.

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What’s next for Kohl’s?

Kohl’s announced it’s working with Goldman Sachs to coordinate with bidders with attractive offers. The retailer says this due diligence will grant these bidders “the opportunity to refine and improve their proposals and include committed financing and binding documentation.”

As of March 22, Kohl’s stock is up more than 25 percent YTD, which is largely due to the prospect of a buyout and premium share offer. Kohl’s has reportedly lost 17 percent of its market share in the past 11 years. Meanwhile, CEO Michelle Gass’ leadership started out strong at its inception in 2018, but shareholders have since grown wary.

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With a buyout, it’s possible that Kohl’s leadership will change along with its status as a publicly-traded company. For now, that’s all in the future—but with numerous bidders interested in adding Kohl’s to their portfolios, that future may come sooner than anticipated.

KSS stock is down marginally on March 22 upon news that the company is reviewing bids, but the value is fluctuating.

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