Vitamin Shoppe owner doubles down on $8B Kohl’s buyout: source

37



The boss of the company that owns Vitamin Shoppe has been telling investors this week he still aims to buy the struggling department store chain despite skepticism from Wall Street, The Post has learned.

Brian Kahn, CEO of the Franchise Group, has been reiterating in private meetings with shareholders that he aims to buy Kohl’s in a mega-deal that values the retailer at $60 a share, or nearly $8 billion, a source with direct knowledge of the situation said.

Franchise Group and Kohl’s announced June 6 they had reached an agreement to enter exclusive talks for three weeks to finalize the deal. Nevertheless, skepticism has grown on Wall Street as surging inflation has hammered retail stocks in recent weeks.

Kohl’s shares were up 3.2 percent Monday in afternoon trading to $42.38, but that is still 28% below the deal price — and about 10% below where they were trading when the exclusive talks were announced.

As The Post reported exclusively exclusively last week, Apollo Global Management is in talks to provide Franchise Group with a $2 billion loan to finance the buyout. Franchise Group is expecting to raise loans to finance the balance of the deal by selling Kohl’s real estate.

While talks with lenders are happening there is still no committed financing, the source said.

According to the source, Kahn said talks with Kohl’s might extend past the agreed-upon three-weeks, but that he would not try to renegotiate the $60-a-share price. Kahn said he was comfortable with Kohl’s revenue and gross margins even during a recession, according to the source.

“He said they didn’t want to change the customer experience,” the source told The Post. “I am more comfortable now that the deal is going to happen.”

Spokespeople for Franchise Group didn’t immediately respond to a request for comment.



Source link

Leave a comment