The Franchise Group, operator of The Vitamin Shoppe health and wellness chain, has entered into an exclusive three-week period of sale negotiations with Kohl’s Corp.
Kohl’s said Monday evening that The Vitamin Shoppe had been given the three-week period to complete its due diligence and arrange financing for an acquisition of Kohl’s. The business is offering $60 a share to acquire Kohl’s.
However, Kohl’s said there is no guarantee a deal with The Franchise Group would be consummated.
Kohl’s provided no further details of The Franchise Group’s bid.
While TFG is now the lead bidder, there have been other bidders including Sycamore Partners, as well as Simon Property Group and Hudson Bay Co., which are believed to have decided not to pursue Kohl’s after showing interest earlier this year. Preliminary offers from different parties were in the $60-plus range.
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News of the arrangement with The Franchise Group on Thursday triggered a 13.5 percent or $5.68 jump in Kohl’s shares in after-hours trading to $47.80. Kohl’s shares had been down somewhat recently, in the low $40 range, following a disappointing first-quarter financial report.
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When the stock price was higher, it was believed that Kohl’s was seeking offers close to $70 a share.
Upon reporting in May its first-quarter results, Kohl’s indicated that with its sales weakening, it decided to lower expectations for sales and earnings in 2022, so net sales are now expected to be flat to 1 percent ahead as compared to the prior year. The operating margin is now expected to be in the range of 7 to 7.2 percent, and earnings per share are expected to be in the range of $6.45 to $6.85, excluding any non-recurring charges.
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