BOSTON (Reuters) – Activist investment firm Macellum Advisors GP LLC on Monday urged Kohl’s (NYSE:KSS) Inc to be more open about its sales process, urging the retailer to give bidders and shareholders a fuller financial picture of itself.
The firm, in a letter to the board, asked the company to say when it plans to accept final bids and explain how much access potential buyers have to management and data to shape their offers. It also asked Kohl’s to pre-release first-quarter financial results before next month’s annual meeting.
Macellum, which owns 5.4% of the retailer, is pushing to take control of Kohl’s board and wants the company to sell itself, arguing that a new “capital-intensive” three-year standalone strategy is hurting the share price.
Kohl’s share price, which closed at $60.34 on Friday, climbed recently because investors are holding out for a sale, Macellum said. But it also accused the board of “putting its thumb on the scale to keep Kohl’s mired in operational mediocrity” and said directors squandered the credibility with shareholders through a secretive and confusing sales process.
“A number of sizable shareholders have informed us that they are extremely frustrated with the Board’s poorly communicated process,” the letter said.
Kohl’s last month said it had contact with more than 20 parties and signed confidentiality agreements with some.
At least three interested parties, including luxury department store operator Hudson (NYSE:HUD)’s Bay Company, private equity firm Sycamore Partners and a group that includes Acacia Research Corp, a holding company for business controlled by activist hedge fund Starboard Value LP, have made bids for Kohl’s, which is valued at $7.8 billion, sources said. Some have offered to pay as much as $70 a share, the sources said.
Several bidders expressed concerns about the speed of the sale process and their ability access to information for diligence purposes, the sources added.
Representatives for the bidders declined to comment.