Kohl's Corp. (KSS) said Monday that it has entered into an exclusive three-week period of negotiations with Franchise Group Inc. (FRG) over a potential sale of the department store operator at $60.00 per share in cash.
The purpose of the period is to allow Franchise Group and its financing partners to finalize due diligence and financing arrangements and for the parties to complete the negotiation of binding documentation, Kohl's said in a statement.
Franchise Group said in a separate press release that if the companies enter into a definitive agreement, Franchise Group plans to contribute approximately $1 billion of capital to the transaction, all of which is expected to be funded through a corresponding increase in the size of its secured debt facilities. A majority of the financing for the transaction is anticipated to be provided on the basis of the real estate assets of Kohl's Corporation.
The companies noted that there can be no assurances that any agreement will be reached or that a transaction will be agreed or completed on the terms set forth above or otherwise.
KSS closed Monday regular trading at $42.12 up $0.64 or 1.54%. In the after hours trade, the stock further gained $5.68 or 13.49%.
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