Hudson’s Bay’s deal to go private hits roadblock
A major shareholder is opposing the deal to take Saks’ parent Hudson’s Bay Co. private.
In October, a group headed up by Richard Baker, executive chairman of the struggling department store company, agreed to pay C$10.30 ($7.84) a share in cash for shares outstanding. The group together own 57% of Hudson’s Bay. Catalyst Capital Group Inc. and select other shareholders that represent 28.24% of Hudson’s Bay total common shares said they plan to vote against the bid. The deal valued the nearly 350-old retailer at $1.45 billion, according to Bloomberg.
“The agreement that the company entered into is so fundamentally conflicted, that it shows the amount of leverage Richard Baker has over the board and management,” stated Gabriel de Alba, managing director and partner of Catalyst. “It is unconscionable that the board would use shareholders' funds in a severely undervalued share buyback with massive tax leakage and dress it up as a premium transaction."
Catalyst urged the retailer’s board to explore alternatives, and said it was "aware of a number of strategic investors that are interested in participating in a process that is open and not constructed to benefit an insider."
“Catalyst itself is also prepared to be a participant in the process and work towards an offer to acquire the company at terms financially superior to the insider issuer bid,” the company stated.