Business

Hudson’s Bay tenders for Kohl’s

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© Reuters. FILE PHOTO: A Kohl’s department store is shown in Encinitas, California October 28, 2014. REUTERS / Mike Blake

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By Praveen Paramasivam

(Reuters) – Canadian department store chain Hudson (NYSE: Bay Co) is bidding for US peer Kohl’s Corp (NYSE:), a source familiar with the matter told Reuters.

Shares of the US retailer, which is facing selling pressure from activist investors, rose 17% to $62.98, valuing the company at about $8.76 billion.

The Wall Street Journal reported on Wednesday, citing people familiar with the matter, that private equity firm Sycamore Partners and Hudson’s Bay are planning to bid as high as $60 per share.

Kohl’s asked suitors to submit an offer on Wednesday, the report said. It added that the company has indicated it believes it is worth more than $70 per share, citing one of the people.

Sycamore Partners declined to comment.

Kohl’s previously rejected two buyback offers, valuing it at between $64 and $65 per share, from Sycamore and Starboard Value backed by Acacia Research. But Kohl’s said this month that investment bank Goldman Sachs (NYSE:) has spent January, February and March talking with more than 20 parties, adding that the bank has provided some of give them access to more financial data.

Axios was the first to report that Hudson Bay was considering a bid for Kohl’s.

“The board will measure potential bids against an attractive stand-alone plan,” Kohl’s said in an email response Wednesday, adding that engagement with potential bidders capacity is “strong and ongoing”.

Saks Fifth Avenue, the parent company of Hudson’s Bay Co, is owned by HBC.

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