Hudson’s Bay agrees to new offer to go private

The battle to take Hudson’s Bay, whose banners include Saks Fifth Avenue, is apparently over.

The department store company has agreed to the new, higher bid by executive chairman Richard Baker and his partners to acquire the retailer for C$11 (or about $8.46 in U.S. dollars) per share in cash. The Baker-led group raised their bid from C$10.30 a share following heated protests from Catalyst Capital Group, a Toronto-based private equity firm that owns a 17.5% stake in the retailer.

Catalyst Capital made an C$11 per share bid for Hudson’s Bay in November that was rejected by a special committee of the board because Baker’s group said it wouldn’t tender its shares. Catalyst has agreed to vote in favor of Baker’s sweetened offer, which has a total valuation of about $1.5 billion in U.S. dollars.

"We are pleased to have reached agreement with the continuing shareholders for a privatization transaction at a substantially increased price, which provides minority shareholders with compelling and immediate value and is supported by our largest minority shareholder,” stated David Leith, chair of the special committee of the HBC board. “I would like to commend Catalyst on their constructive approach to getting a transaction agreed which we believe is in the best interests of the company and the minority shareholders."

The raised offer “delivers significantly more value for all minority shareholders, well above the original proposal,” said Gabriel de Alba, managing director and partner of Catalyst, in a separate statement.

Hudson’s Bay will hold a special meeting of shareholders to approve the privatization transaction in February 2020.