June 28, 2022

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JCPenney owners offer to buy Kohl’s arch-foe for $8.6 billion

JCPenney owners offer to buy Kohl's arch-foe for $8.6 billion

The Post has learned that JCPenney’s owners have made a bid to buy arch rival Kohl’s in a deal that could value the convenience store chain at more than $8.6 billion.

Under the proposal, shopping mall giant Simon Property and Canada-based Brookfield Asset Management – and they are together JCPenney snatched from bankruptcy December 2020 – Offered to buy Kohl’s for $68 per share, according to sources close to the conversations.

Kohl’s shares recently traded Monday at $56.43, down 0.9 percent.

A good source told The Post that the plan is for JCPenney parents to continue to keep two separate brands while simplifying operations and lowering costs. According to the source, Kohl’s bidders plan is to cut costs by $1 billion over the next three years.

The Post has reached out to Simon Property Group and Brookfield Asset Management for comment.

The Post has learned that David Simon, CEO of Indiana-based Simon Property Group, which owns JCPenney, has made an offer to buy retailer Kohl’s at $68 a share.
Bloomberg via Getty Images
Under the terms of the deal, JCPenney's founding fathers will combine the behind-the-scenes operations of the two brands, although the stores will continue to operate under their current names.
Under the terms of the deal, JCPenney’s founding fathers will combine the behind-the-scenes operations of the two brands, although the stores will continue to operate under their current names.
Chris Triplaar / CIPA USA

Kohl’s, based in Wisconsin, put up for sale Earlier this year at the request of Activist investors Macellum and Engine Capital, who were unhappy with the direction of the company.

Private equity giants Sycamore Partners and Leonard Green & Partners as well Canada-based parent company Saks Fifth Avenue Hudson Bay is said to be interested in acquiring Kohl’s.

Goldman Sachs was hired to lead a potential sales operation.

Kohl's put itself up for sale earlier this year after activist investors moved to change the company's management.
Kohl’s put itself up for sale earlier this year after activist investors moved to change the company’s management.
Getty Images

Simon and Brookfield suggested that a single management team run JCPenney and Kohl’s while integrating IT systems so that one unit would be responsible for the chains, according to a source. The source said that the companies will own all the special clothes manufactured with the same internal brand.

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If the sale is completed, the new company will drop plans to roll out the Sephora franchise within Kohl’s locations, The Post has learned.

Simon Property Group is run by CEO David Simon, son of the company’s late co-founder Melvin Simon. David Simon’s uncle, Herb Simon, who co-founded the company with his late brother, is the owner of the Indiana Pacers of the NBA – the team the Simon brothers bought in 1983.

Simon Property Group and Brookfield Asset Management acquire JCPenney after the 118-year-old retailer Filed for Chapter 11 bankruptcy In May 2020.

If the deal goes through, the new owners plan to cut costs, including rolling out a scheme to franchise Sephora cosmetics within Kohl's department stores, the Post has learned.
If the deal goes through, the new owners plan to cut costs, including rolling out a scheme to franchise Sephora cosmetics within Kohl’s department stores, the Post has learned.
Getty Images

JCPenney was one of twenty retail victims of the coronavirus pandemic as lockdown measures prevented in-person shopping while consumers turned to online options like Amazon.

The restructuring forced the closure of a third of its stores nationwide. As of now, only 689 JCPenney sites are in operation – down from more than 1,110 in 2012.