Home News Oak Street in $2B bid for Kohl’s real estate

Oak Street in $2B bid for Kohl’s real estate

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Oak Street Real Estate Capital LLC, a private equity firm, Coles Corporation It will let U.S. retailers lease back stores, according to people familiar with the matter.

Oak Street’s interest offers another chance to seal Cole’s deal after talks to sell it to Vitamin Shop owner Franchise Group Inc. fell through in July for about $8 billion. Deterioration of department store management Outlook. Oak Street sought funding for the franchise group’s bid.

ticker safety last Change change %
KSS Coles Corporation 29.96 +1.59 +5.60%
FRGs franchise group 33.62 -0.35 -1.03%
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Oak Street is currently offering between $1.5 billion and $2 billion to buy the property from Coles, and the two sides have met in recent days to discuss a potential deal, sources said. said. There is no certainty that negotiations will continue and an agreement will be reached, the sources added.

Coles label in a shopping basket at Coles department store in Brooklyn, New York on January 25, 2022. (REUTERS/Brendan McDermid) (Reuters/Brendan McDermid / Reuters Photos)

It was not clear how many of Kohl’s 1,100 stores would be involved in the deal with Oak Street.

A representative for Oak Street declined to comment, but a spokeswoman for Cole could not be reached for comment.

Cole shares surged 9% to $31.04 on Friday’s New York news, giving the company a market capitalization of nearly $4 billion. The stock has fallen nearly 43% since January.

Cole said in July Transaction negotiations with franchise groups I was looking at ways to monetize the property and it failed. Sale-leaseback transforms retailers from landlords to store tenants, allowing them to cash out their accumulated real estate equity. They also have a lease obligation on them.

Oak Street has completed such deals with several retailers, including Bed Bath & Beyond Inc and Big Lots Inc.

ticker safety last Change change %
bbee Bed Bath & Beyond Co., Ltd. 8.63 -0.08 -0.92%
big Big Lot Co., Ltd. 21.38 -0.10 -0.47%

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Kohl’s reported last month that its most recent quarterly results fell on lower sales, forcing management to cut its outlook for the year. Kohl’s reported that net profit fell 63% in the quarter ended July 30, blaming high inflation for a pullback in shoppers. Make it flat or slightly elevated.

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