A hedge fund has targeted Kohl's Corp. with an unsolicited $9 billion purchase offer.

Menomonee Falls-based Kohl's Corp. is the target of an unsolicited purchase offer.
Menomonee Falls-based Kohl's Corp. is the target of an unsolicited purchase offer.

Kohl's Corp. is the target of an unsolicited purchase offer — raising questions about the future of one of Wisconsin's largest companies.

An affiliate of activist hedge fund Starboard Value LP is offering $9 billion to buy the Menomonee Falls-based department store chain.

That's according to a Wall Street Journal report, which cited unnamed "people familiar with the matter."

A group led by Acacia Research Corp., which New York-based Starboard controls, offered to buy Kohl's for $64 a share in cash Friday, according to those sources.

Kohl's stock closed Friday at $46.84 a share.

"As a matter of company policy, Kohl’s does not comment on market rumors or speculation," Jen Johnson, senior vice president/corporate communications, told the Journal Sentinel on Saturday.

The Wall Street Journal article said there are no guarantees the prospective buyers will be able to secure financing for the offer — or that Kohl's will be receptive to it.

Starboard didn't respond to a message seeking more information.

Kohl's management and board of directors are facing pressure from activist investors to make big changes at the company — including a possible sale — with its stock price languishing.

On Tuesday, a different hedge fund, Macellum Advisors, renewed that campaign.

Kohl's directors and executives have "spent another year materially mismanaging the business and failing to implement necessary operational, financial and strategic improvements," Macellum said, in a statement.

Last year, Kohl's and Macellum reached an agreement to add three new board members after that hedge fund raised concerns about the company's direction.

On Tuesday, Macellum also repeated its position that Kohl's should separate its e-commerce and brick-and-mortar operations.

"We believe this can be done in a way whereby the customer experience is unchanged, yet the Company can be accorded a reasonable valuation for this valuable business. Kohl’s needs to show investors the financials of what should be an incredible business and let investors ascribe the appropriate value lesser standalone e-commerce businesses are accorded."

Kohl's responded by stating:

"As part of our agreement with the investor group, which included Macellum, following last year’s proxy contest, we added three independent directors to the Board, each with retail experience. In total, six new independent directors have joined Kohl’s Board in the last three years. These new directors bring highly relevant experience from top roles at leading retail companies including lululemon, Walmart, Burlington, and Kroger."

Macellum said that the company's share price has dropped 22% since the board expansion. It criticized Kohl's for "failing to implement necessary operational, financial and strategic improvements."

Kohl's said net sales increased 16% during the third quarter "due to strong performances across both stores and digital."

"Based on our performance in 2021, we are positioned to exceed our key 2023 financial goals two years ahead of plan," Kohl's said.

Along with employees at stores throughout Wisconsin, Kohl's presence in the state includes the company's headquarters complex at Silver Spring Corporate Park.

Kohl's has around 4,000 headquarters employees in Menomonee Falls, Johnson said. That's part of around 8,000 employees statewide, she said.

The company's 2020 revenue was $16 billion.

That landed it at No. 195 on the latest annual Fortune 500 list of the nation's largest corporations.

The only Wisconsin-based companies which ranked higher on that list were Northwestern Mutual Life Insurance Co., at No. 90, with $33.8 billion, and Manpower Group Inc., at No. 165, with $18 billion.

This story was revised to include the correct Friday closing share price. It was initially reported inaccurately.

Tom Daykin can be emailed at tdaykin@jrn.com and followed on Instagram, Twitter and Facebook.

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This article originally appeared on Milwaukee Journal Sentinel: Kohl's Corp. targeted with $9 billion unsolicited purchase offer