Ohio-based holding company Franchise Group (NASDAQ: FRG) is ready to pay $9 billion for retail store chain operator Kohl’s Corp. (NYSE: KSS), Reuters reported citing people with knowledge of the matter.
Franchise Group is ready to pay $69 for each share of Kohl’s, the sources said. Following the news, KSS stock jumped 5.4% on Tuesday to close at $60.30.
Meanwhile, Hudson’s Bay, a luxury department store operator, has made an indicative offer of at least $70 per share for Kohl’s, the sources added.
Wisconsin-based Kohl’s runs a chain of department stores across the U.S., except Hawaii. At its more than 1,100 locations, the company offers apparel, shoes, accessories and home & beauty products.
Price Target
Based on six Buys, five Holds and one Sell, Kohl’s has a Moderate Buy consensus rating. KSS’ average price target of $66.25 implies nearly 10% upside potential from current levels. Shares have gained 35.4% over the past six months.
Website Traffic
TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (NYSE: SEMR), the world’s biggest website usage monitoring service, offers insight into Kohl’s performance.
According to the tool, compared to the previous year, Kohl’s website traffic registered a 10.6% rise in global visits in March. However, the website traffic has declined 33.8% year-to-date against the same period last year.
Conclusion
Kohl’s has been facing increasing pressure from hedge fund investors to explore a sale. These investors are of the view that the company has not put enough effort to boost sales, which is reflected by its debt load of $6.8 billion at the end of last year.
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