Exclusive: Hudson's Bay's take-private deal falls short
- sources
Send a link to a friend
[December 14, 2019] By
Jessica DiNapoli and Greg Roumeliotis
(Reuters) - Saks Fifth Avenue owner
Hudson's Bay Co <HBC.TO> has fallen short of securing enough shareholder
support for a C$1.9 billion($1.4 billion) deal to take the department
store operator private, people familiar with the matter said on Friday.
A buyout consortium of Hudson's Bay investors led by its Executive
Chairman Richard Baker did not win enough votes from other company
shareholders by a Friday morning deadline in advance of a Dec. 17
special meeting, the sources said.
The sources cautioned that shareholders are allowed to change their mind
up to the time that the special meeting of shareholders is held,
however.
The Ontario Securities Commission (OSC) regulator on Friday said
Hudson's Bay has agreed to postpone the Dec. 17 meeting. It was not
immediately clear when this would now be held.
![](http://archives.lincolndailynews.com/2019/Nov/23/images/ads/current/eaton_lda_HFH_2019.png)
The OSC also dealt Baker another setback by ordering Hudson's Bay to
revise the disclosures it made to its shareholders on Nov. 14 on how the
deal with Baker was put together.
Representatives for Hudson's Bay and Baker's consortium did not respond
to requests for comment.
Baker has argued that Hudson's Bay would be better positioned as a
privately held company to face the brick-and-mortar retail sector's
challenges, shielded from the demands and concerns of stock market
investors amid the rising popularity of online shopping.
[to top of second column] |
![](../images/121419pics/busine43.jpg)
A pedestrian walks past a Hudson's Bay company sign at the
retailer's flagship Toronto store October 28, 2005. REUTERS/J.P.
Moczulski
![](http://archives.lincolndailynews.com/2019/Dec/14/images/ads/current/watkins_quarter_CHRISTMAS_2019.png)
While Baker's offer would pay Hudson's Bay shareholders a 62% premium to the
value of their stock prior to his bid being announced, it values the company at
just a third of its 2015 worth. That has triggered opposition from some Hudson's
Bay investors, including Canadian private equity firm Catalyst Capital Group Inc
and hedge fund Ortelius Advisors LP.
The buyout consortium has 57% voting control over the company, but a majority of
the shareholders not involved with Baker's consortium must approve the offer for
the deal to be completed.
Catalyst, which owns roughly 17.5% of the retailer, made an offer of C$11.00 per
share for Hudson's Bay that a special board committee negotiating on behalf of
the company rejected because Baker's consortium said it was not willing to allow
the sale of the company to another party.
Hudson's Bay's agreement to sell itself to Baker's consortium is for C$10.30 per
share. An independent valuation report by real estate services firms CBRE Group
Inc and Cushman & Wakefield Plc valued Hudson's Bay real estate at $C8.75 per
diluted share, helping Baker's push to convince the special board committee to a
deal closer to his offer.
Hudson's Bay shares ended trading up 2.7% at C$8.88 in Toronto on Friday.
(Reporting by Jessica DiNapoli and Greg Roumeliotis in New York; Additional
reporting by Svea Herbst-Bayliss in New York; Editing by Nick Zieminski, Tom
Brown and Sonya Hepinstall)
[© 2019 Thomson Reuters. All rights
reserved.] Copyright 2019 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content. |