During the coronavirus outbreak in San Francisco, California on September 5, 2020, people shop at Coles department stores.
Liu Sekiseki | Chugoku Shimbun | Getty Images
Activists are reportedly under pressure Coles Consider either selling or separating your online business: Similar move by department store chain Saks Fifth Avenue, According to The Wall Street Journal.
Engine Capital, a New York-based hedge fund, wants Coles to explore two options to raise its share price, the WSJ said. The activist group sent a letter to Cole’s board on Sunday, the report said. Engine Capital owns an approximately 1% stake in Coles.
Coles shares closed at $ 48.45 on Friday. This is where it was traded about 10 years ago, and Coles has a market value of about $ 7.3 billion, which is lower than this. Macy’s But over Nordstrom‘NS. Cole’s share price has risen about 19% to date, below the S & P 500.
According to the WSJ, Engine Capital said in its letter that Coles’ digital business alone is worth $ 12.4 billion, assuming that Coles would generate about $ 6.2 billion in online sales revenue.
Engine Capital also believes that there are private equity firms that pay at least $ 75 per share, the report said. The group of investors also said that discussions with potential buyers could further monetize Cole’s real estate, the WSJ reported.
Coles and Engine Capital representatives did not immediately respond to CNBC’s request for comment.
These discussions arise when investors understand the appeal of owning part of a faster-growing e-commerce sector that operates a more tech-savvy business.It is reported that the digital division of Sax is currently aiming to be open to the public. At a valuation of $ 6 billion, Or about 6 times the profit. By March, it had a valuation of $ 2 billion.
Meanwhile, Macy’s was prompted by Activist group Jana Partners Spin off your e-commerce business from your store in the hope of getting a bigger reputation.Macy’s since then Hired consulting firm AlixPartners Review the business structure.
“We also recognize the significant value that the market is allocating to the pure e-commerce business,” Macy’s CEO Jeff Gennett said in a recent earnings call. “And looking at today’s situation, we’re doing additional analysis that could help with long-term strategies to further unleash the value of Macy’s.”
Coles There was another recent clash with activist investors He questioned the direction of the company and tried to control the board. Groups — Macellum Advisors, Ancora Holdings, Legion Partners Asset Management, 4010 Capital — Agreed with retailers in April We have added several investor-backed independent directors to the board.
In 2014, Engine Capital put pressure on AnneOwned an Ann Taylor and Loft fashion brand, to sell himself. The following year, the company did.
Read the full report from The Wall Street Journal here.
Activists are pressing Coles to consider selling their online business, the report said.
Source link Activists are pressing Coles to consider selling their online business, the report said.