Exclusive-Former Canada prime minister’s hedge fund pushes Kohl’s to sell itself -sources

By Svea Herbst-Bayliss

(Reuters) -An activist hedge fund chaired by former Canadian Prime Minister Stephen Harper is pushing U.S. department store operator Kohl’s (NYSE:) to sell itself, according to people familiar with the matter.

Vision One Management Partners, a fund co-founded by Harper and former Carl Icahn protege Courtney Mather, has built a stake in Kohl’s and expressed concerns to the company about its future, the sources said.

Vision One has asked Kohl’s to launch a sale process and also give it board representation, the sources added, requesting anonymity because the matter is confidential.

Kohl’s and Vision One did not respond to requests for comment.

Kohl’s shares ended trading on Tuesday in New York up 4.9% at $26.80 on the news, giving the company a market value of $3 billion.

The development makes Kohl’s the second U.S. department store operator to come under investor pressure to sell itself in as many months. Last month, Macy’s (NYSE:) rejected a $5.8 billion offer to be taken private by investors Arkhouse Management and Brigade Capital Management, on the grounds it was too cheap and may not have the necessary financing.

In recent years, other activist shareholders have also pushed Kohl’s to explore a sale. The retailer rejected offers worth as much as $64 per share in 2022, because it wanted more than $70 per share, but never got an offer that high.

The retailer has since struggled to make its stores more profitable and grow its e-commerce business.

Kohl’s operates more than 1,100 stores across the United States and a has a retail partnership with LVMH’s beauty products retailer Sephora.

Ancora Holdings, Macellum Capital Management and Legion Partners Asset Management are among the other activist hedge funds that have pushed for changes at Kohl’s.

The company is led by former off-price chain Burlington Stores (NYSE:) CEO Tom Kingsbury, who joined the Kohl’s board in 2021 with backing from Macellum and Ancora. He replaced Michelle Gass, who left in 2022 to join jeans maker Levi Strauss & Co (NYSE:), as CEO in 2023.

Vision One, located in Miami, Florida, and launched in 2022, invests primarily in mid-sized American companies in the industrial and consumer sectors, according to a regulatory filing. It oversaw roughly $128 million in assets as of May 2023.

An economist by training, Harper spent most of his career in politics. He co-founded the modern Conservative Party of Canada and won three successive elections in 2006, 2008 and 2011. He also owns his own consulting firm.

Mather, formerly a portfolio manager for billionaire activist investor Carl Icahn, is a director at Caesars (NASDAQ:) Entertainment and previously held board positions at Herc Holdings (NYSE:) and CVR Energy (NYSE:).