Exclusive-Acacia Research contacts Kohl’s to explore bid for retailer, sources say

By Svea Herbst-Bayliss

BOSTON (Reuters) -Acacia Research, which is backed by activist investor Starboard Value, has reached out to Kohl’s Corp to express its interest in making a bid for the retailer, two sources familiar with the matter said.

Acacia, which buys businesses in sectors such as technology and healthcare, would likely be the lead investor in a bid with Starboard backing it, the sources said.

The outreach comes at a time when hedge fund Macellum Advisors GP LLC is stepping up pressure on Kohl’s to add new board members and hire bankers to consider a sale if the retailer does not improve its business to boost its stock price.

Kohl’s stock price is trading up 2.13% on a day when the broader market is down.

There is no guarantee that any transaction will happen, said the sources, who are not permitted to discuss the private outreach publicly.

As a result of its partnership with Starboard, Acacia has roughly $1 billion in available capital and Starboard would provide additional capital to support a bid, the sources added.

Starboard and Acacia did not immediately respond to requests for comment. A Kohl’s representative said the company cannot comment on “rumors and speculation.”

The sources said that Starboard and Acacia would likely work with Oak Street Real Estate Capital LLC to try and sell off Kohl’s real estate holdings to raise additional capital for a transaction.

Kohl’s real estate holdings are estimated to be worth between $7 billion and $8 billion.

(Reporting by Svea Herbst-Bayliss; Editing by Will Dunham)