Hudson's Bay President Launches Offer to Bring Private Retailers

A group of Hudson's Bay shareholders, led by the retailer's president, announced Monday its intention to take the company behind the Saks Fifth Avenue group in a cash transaction in the amount of 1, $ 74 billion Canadian.

Richard Baker, with a consortium of investors collectively holding 57% of HBC, is offering to buy back the remaining HBC shareholders for C $ 9.45 a share. The price of the offer represents a 48% premium to the closing price of the Canadian retailer's shares on the TSX on Friday.

"We continue to believe in HBC's long-term potential, but it has become clear that the major challenges, risks, and uncertainties HBC faces in a rapidly changing retail environment are better supported in a growing market. private sector, "said Mr. Baker.

"We believe that improving HBC's performance will require a lot of time and long-term patient capital better suited in the context of a private company, without focusing on results and returns. short term."

Hudson Bay divested non-core badets and said last month that it was exploring strategic alternatives for its Lord & Taylor department stores, including a sale or merger, while the Canadian retailer is looking to reduce its debt and its recovery operations. In 2017, the company sold its flagship Lord & Taylor building, located on Fifth Avenue in New York, to the $ 850 million WeWork shared workspace provider.

In spite of these efforts, investors have adopted a bearish view of the company and HBC shares have lost 12% since the beginning of the year, following a 35% decline in 2018. The shares were stopped at Monday's news.

Mr. Baker's group, consisting of Rhône Capital, WeWork Property Advisors, Hanover Investments and Abrams Capital Management, announced that its offering would be funded in part by HBC's sale of its remaining interest in its joint venture for $ 1.5 billion. Morning. The rest will be financed by debt.

Hudson's Bay announced the creation of a special committee of independent directors to review the proposal.

BofA Merrill Lynch and RBC Capital Markets act as financial advisors to the remaining shareholders in connection with the proposed transaction.

The transaction is subject to shareholder and regulatory approval.