Hudson’s Bay Co. shareholders receive offer

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Hudson’s Bay Co. shareholders receive offer

By Dan Berthiaume - 07/25/2019
A suitor has emerged to purchase shares of struggling department store conglomerate Hudson’s Bay Co. (HBC).

The Catalyst Capital Group Inc. has sent an unsolicited offer and letter to HBC shareholders offering to acquire up to 14.8 million common shares of the company for $10.11 (Canadian dollars) per common share in cash.

This offer follows a proposal made in June 2019 by a group of HBC shareholders, led by chairman Richard A. Baker, to take the company private at a price of $9.45 (Canadian dollars) per share, payable in cash. The shareholder group, which also includes Rhône Capital L.L.C. WeWork Property Advisors, Hanover Investments (Luxembourg) S.A. and Abrams Capital Management, collectively own about 57% of the outstanding common shares of the company.

A special committee of the HBC board of directors is evaluating the shareholder group proposal. In a press release, Catalyst said it would take a stake in HBC to oppose the privatization proposal, which it believes "undervalues" the company.

HBC has not yet made a decision regarding the shareholder proposal, but says it is evaluating it, along with other strategic alternatives. As part of this process, the special committee has invited a number of shareholders to share their views regarding the privatization proposal directly with the committee and its financial advisors in the coming weeks.

The special committee has retained TD Securities Inc. as independent valuator to prepare a formal valuation of the common shares of the company in accordance with regulations. The committee has also retained J.P. Morgan Securities as financial advisor, Centerview Partners LLC as special advisor, and Blake, Cassels & Graydon LLP as legal counsel. It has also engaged real estate appraisal firms and planning consultants to assist with valuing HBC’s real estate assets.

HBC does not intend to comment on or disclose further developments regarding the Special Committee’s evaluation unless and until it deems further disclosure is appropriate or required.

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