Kohl’s had entered into exclusive sale talks with Franchise Group in June.
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stock was tumbling more than 15% early Friday after the retailer said it had ended talks to be acquired by
Kohl’s (ticker: KSS) entered into a three-week exclusivity period with the owner of The Vitamin Shoppe in early June.
(FRG) had said it intended to contribute about $1 billion of capital to the transaction.
But on Friday, Kohl’s said the current financing and retail environment made Franchise Group’s most recent proposal not fully executable or complete.
Reports in mid-June said Franchise Group was considering lowering its bid for the department store to about $50 a share from about $60 as the outlook for Kohl’s and the retail industry as a whole has darkened among fears of a U.S. recession.
“Despite a concerted effort on both sides, the current financing and retail environment created significant obstacles to reaching an acceptable and fully executable agreement,” said Peter Boneparth, Kohl’s board chair. “Given the environment and market volatility, the board determined that it simply was not prudent to continue pursuing a deal.”
Boneparth added that the board “remains open to all opportunities” to maximize shareholder value. Kohl’s received bids from more than 25 parties before entering into the exclusive negotiation deal with Franchise Group.
Kohl’s declined 16.2% to $29.92 in premarket trading. The stock was temporarily halted…