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Update 8:32am: Updates shares, adds comment from activist Macellum.
Kohl’s Corp. (NYSE:KSS) dropped 4.5% in premarket trading after a report that the department store chain’s Q1 results may dissuade potential suitors from making offers.
One source familiar with sales process told the NY Post that they were “shocked” by Kohl’s results and the person didn’t believe any acceptable bids would be offered to the retailer. A lending source at an unidentified bank also told the paper that banks are not lining up to finance a huge acquisition in the current market environment.
The NY Post item comes after Women’s Wear Daily earlier on Thursday reported that Kohl’s (KSS) may be leaning toward remaining independent. Kohl’s Chairman Peter Boneparth is said to be against selling the department store chain, according to the report, which cited a source familiar.
The reports come after Kohl’s earlier Thursday said it expects “fully-financed final bids to be submitted in the coming weeks.” The activist pushing for the company to sell itself was dealt a blow last week when Kohl’s holders rejected all of Macellum’s 10 board nominees.
Sources also told the NY Post that they were concerned why the company didn’t preannounced the weak results to the market before shareholders voted at the annual meeting.
Macellum in a statement on Friday morning that “it was alarming to learn yesterday that the current Board appears to have withheld material information from shareholders about the state of Kohl’s in the lead-up to this year’s pivotal annual meeting.”
Macellum it’s “actively exploring” claims against the board and is considering taking legal action if necessary.
Late Wednesday Kohl’s (KSS) announced that its chief marketing officer and chief merchandising officer were set to soon depart.
The NY Post reported late last month that Kohl’s received an offer from Simon Property (SPG) and Brookfield Asset Management (BAM) for $68/share.