Franchise Group plans to lower Kohl’s offer closer to $50 a share from around $60, source says

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People walk near the entrance to a Kohl’s department store on June 7, 2022 in Doral, Florida. Kohl’s said it has entered into exclusive negotiations with Franchise Group, which is offering to buy the retailer for $60 per share.

Joe Raedle | Getty Images

Retail holding company Franchise Group is considering lowering its offer for Kohl’s to closer to $50 a share from around $60, according to a person familiar with the negotiations.

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Kohl’s shares fell more than 10% on Wednesday afternoon.

The owner of The Vitamin Shoppe is actively considering whether or not buying Kohl’s is the best use case for Franchise Group capital, said the person, who asked to remain anonymous because conversations are private and ongoing.

Franchise Group has aligned financing with lenders, the person added. But the company, led by CEO Brian Kahn, is now weighing a lower price as retailers grapple with bloated inventory as consumers balk at higher prices.

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Earlier this month, Franchise Group made a $60 per share offer to acquire Kohl’s at a valuation of around $8 billion. The two companies then entered a three-week window during which they can finalize all due diligence and final financing arrangements. It ends this weekend.

Shares of Kohl opened Wednesday at $41.52 and traded at $34.64 at the end of May.

Representatives for Kohl’s and Franchise Group did not immediately respond to TUSEN’s requests for comment.

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This story is developing. Please check for updates.

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