Kohl’s Stock Gaps Lower After Calling Off Acquisition Talks


Franchise Group lowered its offer to $53 per share

Kohl’s Corporation (NYSE:KSS) announced this morning that it has terminated acquisition talks with Vitamin Shoppe-parent Franchise Group (FRG) after the latter cut its offer to $53 per share on Monday, June 27. Franchise Group initially offered to buy Kohl’s in a deal with $60 per share earlier this month. Peter Boneparth, the chair of Kohl’s board, added that “given the environment and market volatility,” a perusal of the deal was no longer prudent. 

The shares of Kohl’s are plummeting in response, last seen down 18.5% at $29.10 in premarket trading. When talks of the acquisition were announced earlier last month, KSS surged to the $47 level, though this breakout was swiftly captured by the 30-day moving average, which immediately guided shares lower. Should these losses hold, KSS could open at its lowest level since December 2020, adding to its already dismal 27.7% year-to-date deficit. 

An unwinding of optimism among short-term options traders could send the equity even lower. The security’s Schaeffer’s put/call open interest ratio (SOIR) of 0.50 stands higher than just 20% of readings from the past year. In other words, short-term options traders have been unusually call-biased of late. 

 



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