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Kohl’s shares rise after company is urged to put itself up for sale

Shares of Kohl’s are up by more than 7 percent on Tuesday after an activist investor urged the budget department store to sell itself or bring in new board members to improve its performance, according to an investor letter released Tuesday. Macellum Advisors GP, which has a 5% stake in Kohl’s, was part of a group of activist investors that had reached a deal with Kohl’s last year to add several independent directors with more retail experience. In its Tuesday letter, Macellum said Kohl’s had “recently rejected our private offer to collaborate on a broader board refreshment.” The activist investor argued that without these changes, Kohl’s should sell itself or consider other strategic options, because it’s lagging behind competitors and its shares are down by 20% since the Wisconsin-based company reached a settlement with the group of investors in April 2021 to add new directors. In fact, Macellum said it had heard that Kohl’s had “rebuffed overtures from credible buyers,” and that if this is true, it’s “unacceptable and would seem to constitute a meaningful breach of the board’s fiduciary duty,” accord to the letter. Kohl’s said its strategy for growth is on track and that it planned to update shareholders in March on its progress, offering to fill Macellum in on these plans this weekend, according to a statement from Kohl’s. “As recently as this weekend, Macellum refused to enter a confidentiality agreement to hear about the Company’s progress,” Kohl’s said in a statement, in which it said it’s “positioned to exceed our key 2023 financial goals two years ahead of plan.” Kohl’s will disclose its plans at a March 7 investor day, the company said. Last year, Macellum along with the other investors urged Kohl’s to sell some of its real estate holdings and lease them back to the company, which Kohl’s decided not to do, the company said. The idea, Macellum argued, was to monetize the retailer’s $4 billion worth of real estate, returning the proceeds to shareholders, which the activist investor said would boost its stock to $100 a share. Kohl’s shares are worth about half that amount today.

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