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Update 9:40pm: Adds reporting from NY Post on meetings this week.

Kohl’s (NYSE:KSS) dropped 9% on a report Wednesday that bidder Franchise Group (NASDAQ:FRG) is considering lowering its offer to $50/share from $60/share. Franchise Group ticked up 0.6%.

Franchise Group is evaluating whether acquiring Kohl’s (KSS) is the best way to deploy the firm’s capital, according to a CNBC report, citing a person close to the deal talks. FRG appears to be worried that certain retailers may be hurt if the economy gets weaker and goes into a recession.

Franchise Group (FRG) CEO Brian Kahn is said to have told investors in private meetings this week that he may try to negotiate the deal price, though he hasn’t spoken to Kohl’s (KSS) yet, according to a NY Post report.

The update comes after Kohl’s (KSS) announced earlier this month that it entered exclusive talks with Franchise (FRG) for a potential $60/share sale of the department store chain. The Kohl’s board announced it entered exclusive negotiations with FRG for a period of three weeks.

The latest news also follows a Reuters report from Tuesday that FRG is said in talks to retain Kohl’s (KSS) management, including the department store’s CEO Michelle Gass, if a planned sale is completed.

A week ago the NY Post reported that Vitamin Shoppe parent Franchise Group (FRG) was still committed to the $60/share deal.

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