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Shares of Kohl’s Corp (NYSE:KSS) are down almost 15% in premarket trading Friday after the company reportedly abandoned sale talks with Franchise Group (NASDAQ:FRG), according to CNBC.
The move comes after the department store retail chain continues to see a major slowdown in sales. The company has been pushed by activist investors over the past few months to sell its business and revamp its board of directors.
The timing to fund such an acquisition is far from ideal due to sharp volatility and uncertainty around the stock market and the U.S. economy as the Federal Reserve hikes interest rates to curb the record-high inflation.
Earlier this week, Walgreens Boots Alliance (NASDAQ:WBA) also terminated its plan to sell its U.K. pharmacy unit because no interested party came up with an acceptable offer due to the current market commotion.
Franchise Group, which houses well-known retail brands such as American Freight, Buddy’s Home Furnishings, and The Vitamin Shoppe, has been considering reducing its takeover bid for Kohl’s to around $50 per share from $60 per share, according to recent reports.
The holding company was reportedly weighing slashing the offer because of the ongoing challenges in the retail industry and increasing concerns over a potential recession.
Earlier this month, Franchise Group offered to acquire Kohl’s for $60 per share at a valuation of about $8 billion, after which the two companies initiated talks to negotiate due diligence and final agreements, but the deal fell apart in the end.
Kohl’s stock is down nearly 30% this year.
