Hudson’s Bay Co. has reached a deal to go private.
The Canadian department store chain has accepted an offer from a group led by HBC chairman Richard Baker and will buy shares held by select minority stakeholders for CA$11 ($8.46) apiece, it announced Friday. Hudson’s Bay’s largest minority shareholder, The Catalyst Capital Group Inc., has voted in favor of the go-private agreement.
In November, the Baker group — which collectively owned 57% of HBC shares — proposed going private, making an all-cash offer of CA$10.30 ($7.86) per share. Toronto-based private equity firm Catalyst — which owns a 17.5% stake in HBC — made a counteroffer of CA$11.00 ($8.29) per share for all common shares of the retailer.
On behalf of his consortium of investors, which includes Rhône Capital LLC and WeWork Property Advisors, Baker wrote a letter in early December opposing Catalyst’s counter, accusing the the group of intending “to mislead minority shareholders” and “manipulate the market.”
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This week, the Baker group upped its offer to around CA$11 per share, roughly matching Catalyst’s bid. A vote by the HBC special committee, which will include votes cast by Catalyst, will be held next month to approve the privatization deal.
“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,” said David Leith, chair of the special committee of the HBC Board of Directors, in a statement.
As it seeks to go private, HBC continues to face challenges. For the most recent quarter, the Saks Fifth Avenue parent’s losses widened to $CA226 million ($171 million), from $CA161 million ($122 million) in the prior-year period. Revenues remained flat at $CA1.84 billion ($1.39 billion).
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