T. Rowe Price says it plans to back Kohl's nominees in proxy fight with Macellum

T. Rowe Price Associates, one of the biggest investors in Kohl's Corp, said it plans to back all of the department store's directors, dealing a setback to activist hedge fund Macellum Advisors as it tries to take control of the board.

"We intend to vote FOR the 13 nominees presented by the Kohl’s board. We do not intend vote on the Macellum card, and we will not support any of its 10 nominees," T. Rowe Price said in a case study about how it intends to vote.

Investors will be able to vote at the May 11 meeting. T. Rowe Price owned 6.8 million shares or 5.29% of the company at the end of December.

Macellum, led by Jonathan Duskin, has accused Kohl's of not doing enough to improve its business. The fund called for the company to put itself up for sale, which it is now doing by reviewing potential bidders.

The battle for control of Kohl's boardroom has become one of this year's most contentious proxy battles and occurs as the company is reviewing bids from potential buyers.

Last week Franchise Group Inc, owner and operator of retail stores such as The Vitamin Shoppe and Buddy's Home Furnishings, entered the bidding with a $9 billion indicative offer. 

Kohl's has said that its investment bankers have held conversations with more than 20 potential buyers in the last months.

This is also the second time in two years that Macellum has pushed for changes at Kohl's. It sought to replace nine board directors last year in a campaign conducted with hedge funds Ancora Holdings Inc and Legion Partners Asset Management LLC. The investors agreed to drop that challenge when Kohl's expanded the size of its board by three directors.