Kohl’s Stock Jumps On Acquisition Possibility

June 07, 2022

Kohl's Corporation (KSS) jumped 9% on Tuesday amid reports that the company entered an exclusive negotiating period with Franchise Group, Inc. The reported offer on the table could mean Kohl's is sold for $8 billion. The stock is a holding in 136 ETFs.  

The Emles Alpha Opportunities ETF (EOPS) has the largest exposure to the stock, at 10.51% to the stock.  

 

 

U.S.-listed ETFs in aggregate hold 17.8 million shares of Kohl's stock. Topping the list by a wide margin is the iShares Core S&P Mid-Cap ETF (IJH), with 3.96 million shares, or roughly 22% of all the shares held in ETFs. 

 

 

Regular cap-weighted ETFs are the largest category, representing about 23% of the ETFs that hold the stock. Multifactor ETFs are close behind, with 26 funds, while another 25 actively managed ETFs also hold KSS.  

 

 

Possible Acquisition 

Kohl's Corporation and Franchise Group, Inc. both announced on Monday they have entered an exclusive negotiation period with each other. Franchise Group offered to buy Kohl's for $60 per share, a big jump from its current trading price of $44.76. Prior to Monday's announcement, the stock was trading at $41.87. 

The price jump and news of a favorable evaluation has to be music to the ears of KSS investors.  

Retail has been hit hard so far in 2022 across the board due to rising inflation and global supply chain issues. Kohl's Corp. has been no exception. The company's 52-week-high, which it hit in January, is $64.38. 

So far this year, the company has turned down multiple offers for acquisition that it deemed "too low." In May, activist investor Macellum Capital Management also attempted to overhaul the Kohl's board and insisted the company be more "transparent" about sales. 

Franchise Group already owns Pet Supplies Plus, The Vitamin Shoppe, American Freight Furniture, along with a few other brands. The purchase of Kohl's would be its first holding in the retail sector.  

 

(Use our stock finder tool to find an ETF’s allocation to a certain stock.) 

 

On its website, Franchise states that it looks to acquire businesses that are "economically resilient," as well as companies that have adaptable structures and a long-term investment horizon. 

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