An activist investor is urging department store chain Kohl s Corp. to consider a sale of the company or the separation of its e-commerce business.
The letter sent to Kohl's KSS, board Sunday, and viewed by The Wall Street Journal, shows that the New York-based hedge fund Engine Capital LP wants the retailer to examine the two alternatives to improve its lagging stock price. Engine owns a roughly 1% stake in Kohl's.
Engine argues that the company has underperformed the S&P 500 and other retailers in recent years. Kohl's shares closed Friday at $48.45, roughly where they were 10 years ago, giving the company a market value of around $7 billion. Engine stated in the letter that Kohl's digital business alone would be worth $12.4 billion, assuming online sales revenue of around $6.2 billion. Engine believes there are private equity firms that would pay at least $75 a share, and that interactions with potential buyers suggest they could do so by monetizing Kohl's real estate. China seeks its first military base on Africa's Atlantic coast, U.S. intelligence finds.