Kohl's shares surged after report that Sycamore Partners had approached the department store chain with a potential takeover offer of $9 billion
A sign marks a Kohl's store in Medford, Massachusetts, U.S., February 21, 2017. REUTERS/Brian Snyder/File Photo GLOBAL BUSINESS WEEK AHEADEngine, which owns around 1% of Kohl's, on Monday urged the retailer to "aggressively pursue" a buyout offer with a 37% premium, referring to Acacia's offer.
A few analysts said Kohl's, which has a market capitalization of $6.52 billion, could fetch a higher valuation. "KSS is a strong FCF generator, and it doesn't seem to be getting credit by the market, making it reasonable to consider offers," Citi's Paul Lejuez wrote in a note.Shares were on course for their best day ever, with the news also pushing rivals Macy's and Nordstrom higher.
However, UBS analysts are unconvinced a deal would happen as they doubt Kohl's real estate has enough value to serve as adequate collateral. They added operational changes suggested by the activists would not stop market-share losses and might not convince creditors to lend enough capital.