Department store chain JCPenney’s owners have offered to acquire Kohl’s Corp. (NYSE: KSS) for at least $8.6 billion, The Post reported citing sources.
Canada-based Brookfield Asset Management (NYSE: BAM) and real estate investment trust Simon Property (NYSE: SGP), which acquired JCPenney in December 2020, have proposed to pay $68 for each share of Kohl’s.
The source said that the bidders are planning to cut $1 billion in costs at Wisconsin-based Kohl’s over the next three years. Further, the merged company would not launch concession stands for Sephora at Kohl’s stores.
The source added that both Kohl’s and JCPenney would be managed by a single team following the completion of the acquisition. Additionally, their IT systems would be merged and their private apparel would be made by the same in-house brand.
Meanwhile, Canada-based luxury department store chain operator Hudson’s Bay as well as equity firms Sycamore Partners and Leonard Green & Partners are also interested in acquiring Kohl’s.
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.
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 9.8% upside potential from current levels. Shares have gained 25.5% over the past six months.
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, Kohl’s website traffic registered a 10.6% rise in global visits in March, compared to February. However, the website traffic has declined 33.8% year-to-date against the same period last year.
After the acquisition news was released on Monday, KSS stock closed 5.3% up. It gained another 0.7% in the extended trading session to end the day at $60.79.
The company has been facing increasing pressure from activist investors to sell itself as they are not satisfied with Kohl’s growth plans.
Learn more about the Website Traffic tool in this video by Youtube sensation Tom Nash.