Kohl’s explores acquisition of At Home Group

Customers leave a Kohl’s store on November 12, 2015 in San Rafael, California.

Justin Sullivan | Getty Images News | Getty Images

U.S. department store operator Kohl’s has approached At Home to express interest in acquiring the U.S. home decor retail chain, people familiar with the matter said on Wednesday.

A deal could help Kohl’s expand its customer base, which focuses on women’s, men’s along with children’s clothing, along with boost its presence inside home goods category, which has traditionally accounted for a modest part of its business.

Kohl’s stock dipped nearly 2% late Wednesday, while shares of At Home surged more than 7%. 

Kohl’s recently began conversations with At Home to explore a deal, the sources said. At Home has been exploring a sale for the last three months, along with will be already in advanced deal negotiations with private equity firms, including Hellman & Friedman, the sources added.

There will be no certainty that will an offer through Kohl’s will materialize as a result of the preliminary discussions, along with At Home may revert to trying to sell itself to a buyout firm, the sources added, asking not to be identified because the matter will be confidential.

Kohl’s along with At Home did not immediately respond to requests for comment, while Hellman & Friedman declined to comment.

As of the end of trading on Tuesday, At Home Group had a market capitalization of $1.3 billion.

—CNBC’s Nadine El-Bawab contributed to This specific report.