: Kohl’s failed takeover was just one of a wave of abandoned deals amid market volatility

by | Jul 1, 2022 | Stock Market

Kohl’s Corp. announced Friday that takeover talks with Vitamin Shoppe parent Franchise Group Inc. have ended, adding to a wave of ditched business deals amid unfavorable market conditions. Kohl’s
said it communicated with 25 parties, but Franchise Group’s
bid of $60 per share led to “exclusive negotiations.”

“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, in a statement. “Given the environment and market volatility, the Board determined that it simply was not prudent to continue pursuing a deal.” The news sent Kohl’s stock into a nosedive, down 21.4% in Friday trading. Also on Friday, Panera Brands Inc., which includes Panera Bread and Caribou Coffee, and USHG Acquisition Corp.

announced the end of their partnership, which had a goal of taking Panera public once again. “Unfortunately, the deterioration of capital market conditions over the last several months has led to the realization that an IPO may not be imminent, and as a result we felt it was appropriate not to extend our planned partnership,” said Niren Chaudhary, CEO of Panera Brands, in a statement. Earlier this week, Walgreens Boots Alliance Inc.
completed its strategic review Boots and No7 Beauty Company businesses and decided to keep them, saying that no one made an adequate offer. “We have now completed a thorough review of Boots and No7 Beauty Company, with the outcome reflecting rapidly evolving and challenging financial market conditions beyond our control,” said Walgreens Chief Executive Rosalind Brewer in a statement. And while Walgreens’ Brewer said on the company’s Thursday earnings call that Boots, as well as the beauty and health categories broadly, are in an “exciting time,” she also said the company remains open to opportunities. “We had previously thought Walgreens would use the Boots proceeds to help pay down debt to hit its targeted leverage ratio,” wrote UBS in a note. “However, with a Boots sale now off the table, Walgreens may need to tap other funding sources, including possibly unwinding more of its AmerisourceBergen stake (similar to its recent $900 million sale of Amerisource Bergen stock) to generate cash to pay down debt.” See: AmerisourceBergen’s stock tanks after largest investor sells $900 million worth of shares From high inflation to snarled supply chain networks, the land …

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