Hudson’s Bay Co soars as chairman leads bid to take retailer private

Daniel Fowler
June 12, 2019

A group of shareholders has submitted a CAD 1.74 billion (approximately $1.32 billion) bid to take Hudson's Bay Co.

"We believe that improving (Hudson's Bay's) performance will require significant time and patient long-term capital that is better suited in a private company context without the emphasis on short-term results and returns", said Baker in a statement.

The company said a special committee of independent directors will review the shareholders' privatization proposal and oversee a formal valuation.

"If you don't go through these processes, you are really vulnerable to a lawsuit alleging that you shoved this down their throats", said Eric Talley, co-director of the Millstein Center for Global Markets and Corporate Ownership at Columbia Law School in NY.

The department store retailer also said it pursuing strategic alternatives for the Lord & Taylor business.

In a statement, CEO Helena Foulkes said that the deal to retreat from Europe allows the retailer to "fully focus our resources on HBC's North American operations, including our best growth opportunities - Saks Fifth Avenue and Hudson's Bay".

The Canadian retailer will also exit the European market, selling the company's remaining 49.9 per cent stake of its real estate joint venture in Germany to its partner, SIGNA, for US$1.5 billion.

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The proposed deal reflects a purchase price of $9.45 per unit in cash, representing a total value of $1.74 billion, Reuters reported.

In addition to Baker, the shareholder group includes Rhone Capital LLC, WeWork Property Advisors, Hanover Investments (Luxembourg) SA and Abrams Capital Management LP.

Workers on automated systems at the Hudson's Bay Company distribution centre in Toronto, Ontario, Canada May 29, 2017. The store has had several owners.

Baker took the company public in 2012, following up with a string of acquisitions, including Saks Fifth Avenue for $2.9 billion, Gilt Groupe for $250 million, and German department store chain Galeria Kaufhof from Metro Group for $3.2 billion.

It also includes WeWork Property Advisors, which in the same year agreed to buy Hudson's Bay's flagship Lord & Taylor building in NY for US$850 million.

Sears Chairman Edward Lampert also orchestrated deals to keep the retailer alive, before it filed for bankruptcy a year ago.

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