Wisconsin senator urges Kohl’s to decline any offer for buyout that may prelude or threaten bankruptcy filings.

On Thursday, Sen. Tammy Baldwin (Democrat) wrote to Kohl’s board asking them to refuse proposals to increase debt, hive off assets, or raise shareholder payouts, at the cost of reinvesting the money in the business.

Baldwin’s letter was read by CNBC.

CNBC did not receive a response from Kohl’s immediately to our request for comment.

Following months of activism, Kohl’s announced Monday that it would be selling its products. confirmed it had received multiple preliminary offersParties interested in purchasing the chain of department stores. Kohl’s declined to name the bidders. A source close to the situation said that one offer was made by Hudson’s Bay Co. (a Canadian retail conglomerate). Reports have also indicated that Sycamore Partners, an equity fund, is looking to make a bid. Sycamore spokesmen declined to comment.

Kohl’s has already rejected one offer — from Starboard-backed Acacia Research — to acquire the business for a price tag of $64 per share. Kohl’s deemed the deal to be too lowHowever, it is now working with Goldman Sachs’ bankers to identify other possible suitors. It claims to have engaged with over 20 parties so far. Kohl’s shares were trading Friday morning at $61.67. They have risen about 24% in the past year.

Hedge funds and private equity firms have been accused of putting retailers in bankruptcy and squeezing workers. This 2019 report was prepared by United for RespectPrivate equity retail ownership led to the loss of jobs for more than 1.3million Americans in 10 years. The two most prominent examples are the Bankruptcy at Sears and Toys R Us.

Baldwin wrote to ShopKo in Wisconsin. ShopKo was also established in Wisconsin and ended up in debt after Sun Capital Partners bought it in 2005. Its purchase price for Sun Capital Partners is approximately $1.1 million. ShopKo applied for bankruptcy protection in 2019. It was eventually liquidated by Sun Capital Partners after failing to find an buyer.

Baldwin said ShopKo’s nearly 3,000 Wisconsin workers lost their jobs. “Wisconsinites are concerned about Kohl’s repeat of history,” Baldwin said.

Kohl’s employed approximately 99,000 people in 2021. Part-time workers were also included during the holiday season. Baldwin says that Kohl’s employed approximately 8,000 Kohl’s employees across Wisconsin.

Senator said, “I am aware that you have been under considerable pressure by various investment funds which recently bought large blocks Kohl’s outstanding shares.” “I think that the request that ‘their capital’ be returned by stock repurchases only serves short-term shareholders to gain a lot of money.”

Kohl’s will hold an annual shareholder meeting on May 11th.

Kohl’s sent a March 21 letter to shareholders in which it stated that “While we are confident in our strategic plans, our board tests and measures them against other options.” … The board will continue to pursue the best path for shareholder value.