Activist investor urges Kohl’s to sell — or to spin off its online business

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An active investor is urging department-store chain Kohl’s Corp to consider selling the company or divestment of its e-commerce business.

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According to a letter sent to Kohl’s KSS, New York-based hedge fund Engine Capital LP wants the retailer to examine two options for its backward stock price correction.
-2.89%
Board seen by Sunday and the Wall Street Journal. The engine owns about 1% of Kohl’s.

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Engine argues that the company has underperformed both the S&P 500 and other retailers in recent years. Shares of Kohl’s closed Friday at $48.45, roughly where they were 10 years ago, giving the Menomonee Falls, Wis., company a market value of nearly $7 billion.

Engine said in the letter that assuming online sales revenue of approximately $6.2 billion, Kohl’s digital business alone would be worth $12.4 billion. Engine also said it believes there are private-equity firms that will pay at least $75 per share and talks with potential buyers suggest they can do so by monetizing Kohl’s real estate. can do.

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Kohl’s did not immediately respond to a request for comment.

An expanded version of this report appears on WSJ.com.

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