Hudson’s Bay takeover saga nears an end

Hudson’s Bay Company has moved closer to being taken private.

A special committee of the department store company’s board has reaffirmed its endorsement of a buyout of shares to take the company private by a group headed by executive chairman Richard Baker after receiving an updated valuation. The valuation was one of the conditions of a deal that was announced earlier this month.

On Jan. 3, the Baler-led group, which owns 57% of Hudson’s Bay, upped his bid to take the company private to C$11 per share. The increased offer won the backing of dissenting minority shareholder Catalyst Group Inc., with the condition that TD Securities Inc. provide a new formal valuation of Hudson's Bay prior to a vote and that "the lower end of the range of the fair market value of the HBC Shares is equal to or less than $11." (Catalyst owns about 17.5% of Hudson’s Bay.)

On January 27, Hudson’s Bay said the updated valuation determined that, as of that same date, the fair market value of the common shares of the company ranged between C$9.75 and C$12 per common share. TD Securities said that the payment to the common shareholders of HBC "is fair, from a financial point of view, to such shareholders."

“Accordingly, the special committee of the HBC Board of Directors has reaffirmed its unanimous recommendation to the board that the privatization transaction with a group of existing shareholders is in the best interests of the company and fair to the company’s other shareholders (the “Minority Shareholders”),” Hudson’s Bay stated in a release. 
The transaction will be voted on at special meeting of shareholders on Feb. 27. In order to pass, it will need at least 75% of the votes cast by all shareholders and at least a simple majority of votes by minority shareholders. 

Hudson’s Bay’s leading banners across North America include Saks Fifth Avenue, Hudson’s Bay and Saks Off 5th. It also has significant investments in real estate joint ventures. It has partnered with Simon Property Group Inc. in the HBS Joint Venture, which owns properties in the United States. In Canada, it has partnered with RioCan Real Estate Investment Trust in the RioCan-HBC Joint Venture.