- $150 million offer is for $10.11 per common share of HBC payable in cash for up to 14,836,795 common shares
- Catalyst Offer provides a significant premium and immediate alternative to the Insider Buyout Proposal announced on June 10, 2019
- Catalyst will oppose Insider Buyout Proposal and requests Special Committee to explore alternatives that will maximize value for all shareholders
TORONTO , July 22, 2019 /CNW/ - The Catalyst Capital Group Inc., on behalf of investment funds managed by it, ("Catalyst") is pleased to announce an offer (the "Catalyst Offer") to purchase up to 14,836,795 common shares of Hudson's Bay Company (HBC.TO) ("HBC" or the "Company") at a price of $10.11 per common share (the "Purchase Price"), payable in cash.
The Purchase Price is equal to an approximate 7% premium to the $9.45 per share price offered by certain insiders of the Company in their buyout proposal announced on June 10, 2019 (the "Insider Buyout Proposal"), an approximate 59% premium to the closing price of the common shares on the Toronto Stock Exchange (the "TSX") on June 7, 2019 (the last trading day prior to the announcement of the Insider Buyout Proposal) and an approximate 52% premium to the volume-weighted average trading price of the common shares on the TSX for the 30 trading days prior to the announcement of the Insider Buyout Proposal.
The Catalyst Offer is for up to 14,836,795 of the outstanding common shares of the Company. The Catalyst Offer is open for acceptance until 5:00 p.m. ( Toronto time) on Friday, August 16, 2019 (the "Expiry Time"), unless the Catalyst Offer is extended, varied or withdrawn.
Catalyst has posted at www.sedar.com, under the Company's profile, a letter to shareholders setting out more information pertaining to the Catalyst Offer as well as a letter of transmittal (the "Letter of Transmittal") to be used to accept the Catalyst Offer (collectively, the "Letters"). The letter to shareholders has also been publicly disclosed by way of a separate press release. Please also see "Details of The Catalyst Offer" below.
REASONS FOR THE CATALYST OFFER
The Insider Buyout Proposal made by the controlling shareholders of the Company and certain other insiders (collectively, the "Controlling Insiders") is not reflective of the fair value of the Company's common shares.
- Catalyst believes that the Insider Buyout Proposal greatly undervalues the Company across each of its real estate, retail and iconic brand attributes.
- The Controlling Insiders are only using shareholder capital and assets to buy out the Company's minority owners at a price which Catalyst believes is not at all reflective of fair value.
- Catalyst acknowledges that the Company's board of directors has formed a special committee (the "Special Committee"), which has announced that it intends to review the Insider Buyout Proposal. Catalyst believes that, in addition to reviewing the Insider Buyout Proposal, the Special Committee has a duty to explore any and all transactions that have the potential to maximize value for all shareholders over the near or long-term.
- As a result of the Catalyst Offer, shareholders will receive immediate liquidity at a premium to the current trading price of the common shares and at a significant premium to the Insider Buyout Proposal.
- In the event that the Special Committee and the Company agree to proceed with the Insider Buyout Proposal, Catalyst will vote the common shares over which it exercises control or direction, including any common shares acquired under the Catalyst Offer, against the Insider Buyout Proposal at any meeting of the Company's shareholders called to approve such transaction.
DETAILS OF THE CATALYST OFFER
The Catalyst Offer is open for acceptance until 5:00 p.m. ( Toronto time) on Friday, August 16, 2019 , provided however that Catalyst reserves the right, in its sole and absolute discretion at any time, to: (i) extend or vary the Catalyst Offer at any time; or (ii) withdraw the Catalyst Offer if the conditions thereto are not met, and if withdrawn, it will not be required to take up or pay for common shares delivered pursuant to the Catalyst Offer.
If the Catalyst Offer is withdrawn by Catalyst, Catalyst shall cause all common shares delivered pursuant to the Catalyst Offer to be returned to the shareholders. Full details of the Catalyst Offer are included in the Letters, including complete instructions for the tendering and delivery of common shares to Catalyst. In order to deposit their common shares to the Catalyst Offer, registered shareholders must complete the documentation as set out in the Letter of Transmittal and beneficial shareholders must follow the instructions provided by their investment dealer, broker or other nominee. Investment dealers, brokers and other nominees may set a deadline for the delivery of deposit instructions that is earlier than the Expiry Time, and as such shareholders should contact their investment dealer, broker or other nominee for assistance at their earliest convenience. Deposited common shares may be withdrawn at any time prior to the time they are taken up by Catalyst.
The Catalyst Offer will be subject to certain conditions set out in the Letters which, unless waived, must be satisfied. The Letters will require that each depositing shareholder whose common shares are taken up and paid for appoint representatives of Catalyst as its nominees and proxy for any upcoming shareholders' meeting.
If more than the maximum number of common shares for which the Catalyst Offer is made are delivered in accordance with the Catalyst Offer and not withdrawn at the time of take up of the common shares, the common shares to be purchased from each depositing shareholder will be determined on a pro rata basis according to the number of common shares delivered by each shareholder, disregarding fractions, by rounding down to the nearest whole number of common shares.
If you have any questions with respect to the Catalyst Offer, or need assistance in depositing your common shares, please contact the Depositary and Information Agent for the Catalyst Offer: North America Toll Free Number: 1-877-452-7184; Outside North America Call Collect: 1-416-304-0211; Email: firstname.lastname@example.org.
Catalyst is relying on the exemption under section 9.2(4) of National Instrument 51‐102 ‐ Continuous Disclosure Obligations to make this public broadcast solicitation. The following information is provided in accordance with corporate and securities laws applicable to public broadcast solicitations.
This solicitation is being made by Catalyst, and not by or on behalf of the management of HBC. Laurel Hill Advisory Group will receive a fee of $45,000 for its services as Depositary and Information Agent under the Catalyst Offer plus ancillary payments and disbursements. Based upon publicly available information, HBC's registered office is at 401 Bay Street, Suite 500, Toronto, Ontario, Canada M5H 2Y4 and its head office is at 8925 Torbram Road, Brampton, Ontario, Canada L6T 4G1. Catalyst is soliciting proxies in reliance upon the public broadcast exemption to the solicitation requirements under applicable Canadian corporate and securities laws, conveyed by way of public broadcast, including press release, speech or publication, and by any other manner permitted under applicable Canadian laws. In addition, this solicitation may be made by mail, telephone, facsimile, email or other electronic means as well as by newspaper or other media advertising and in person by employees of Catalyst. All costs incurred for the solicitation will be borne by Catalyst.
A registered shareholder who has given a proxy under the terms of the Letter of Transmittal may, prior to its common shares being taken up and paid for under the Catalyst Offer, in accordance with Section 148(4) of the Canada Business Corporations Act, revoke the proxy (i) by depositing an instrument or act in writing executed or, in Québec, signed by such registered shareholder or by his, her or its personal representative authorized in writing, either: * at the registered office of HBC at any time up to and including the last business day preceding the day of the meeting, or an adjournment thereof, at which the proxy is to be used, or (y) with the chairman of the meeting on the day of the meeting or an adjournment thereof; or (ii) in any other manner permitted by law. A non‐registered shareholder may revoke a form of proxy or voting instruction form given to an intermediary at any time by written notice to the intermediary in accordance with the instructions given to the non-registered shareholder by its intermediary. Non-registered shareholders should contact their broker for assistance in ensuring that forms of proxies or voting instructions previously given to an intermediary are properly revoked. None of Catalyst and its directors and officers, or, to the knowledge of Catalyst, any associates or affiliates of the foregoing, has any material interest, direct or indirect, in any transaction since the commencement of HBC's most recently completed financial year, or in any proposed transaction which has materially affected or will materially affect HBC or any of its subsidiaries. None of Catalyst or, to its knowledge, any of its associates or affiliates, has any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter to be acted upon at any upcoming shareholders' meeting, other than as set out herein and in the Letters.
The Catalyst Offer is not a formal or exempt takeover bid under applicable Canadian securities laws and regulations.
Catalyst has engaged Laurel Hill Advisory Group as Depositary and Information Agent, McMillan LLP as Canadian legal advisor, and Brown Rudnick LLP and Latham & Watkins LLP as U.S. legal advisors. Gagnier Communications is serving as strategic communications advisor to Catalyst.
The Catalyst Capital Group Inc., a private equity investment firm with more than $6 billion in assets under management, is a Canadian private equity investment firm founded in June 2002 . Catalyst specializes in control and/or influence investments in distressed and undervalued Canadian situations. The Catalyst team collectively possesses more than 110 years of relevant experience in restructuring, credit markets and merchant and investment banking in both the U.S. and Canada . For more information, please visit www.catcapital.com.
Shareholder with questions or who need assistance tendering their common shares can contact the Depositary and Information Agent:
Laurel Hill Advisory Group
North America Toll Free : 1-877-452-7184
Collect Calls outside North America : 1-416-304-0211
Certain statements contained in this press release, including statements regarding taking up and paying for common shares deposited under the Catalyst Offer and the ability to vote against and defeat the completion of the Insider Buyout Proposal, contain "forward-looking statements" and are prospective in nature. Forward-looking statements are not based on historical facts, but rather on current expectations and projections about future events, and are therefore subject to risks and uncertainties that could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as "plans", "expects", "intends", "anticipates", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Although Catalyst believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed on such statements. Material factors or assumptions that were applied in formulating the forward-looking information contained herein include the assumption that the business and economic conditions affecting HBC's operations will continue substantially in the current state, including, without limitation, with respect to industry conditions, general levels of economic activity, continuity and availability of personnel and third party service providers, local and international laws and regulations, foreign currency exchange rates and interest rates, inflation, and taxes, and that there will be no unplanned material changes to HBC's facilities, operations and customer and employee relations. Catalyst cautions that the foregoing list of material factors and assumptions is not exhaustive. Many of these assumptions are based on factors and events that are not within the control of Catalyst and there is no assurance that they will prove correct. Important factors that could cause actual results, performance or achievements to differ materially from those expressed or implied by such forward-looking statements include, among other things, actions taken by HBC or the Controlling Insiders in respect of the Catalyst Offer, the failure to satisfy the conditions of the Catalyst Offer, industry risk and other risks inherent in the running of the business of HBC, foreign currency exchange rates and interest rates, general economic conditions, legislative or regulatory changes, changes in income tax laws, and changes in capital or securities markets. These are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in any of Catalyst's forward-looking statements. Other unknown and unpredictable factors could also impact its results. Many of these risks and uncertainties relate to factors beyond Catalyst's ability to control or estimate precisely. Consequently, there can be no assurance that the actual results or developments anticipated by Catalyst will be realized or, even if substantially realized, that they will have the expected consequences for, or effects on, Catalyst or HBC and their respective future results and performance. Forward-looking statements in this press release are based on Catalyst's beliefs and opinions at the time the statements are made, and there should be no expectation that these forward-looking statements will be updated or supplemented as a result of new information, estimates or opinions, future events or results or otherwise, and Catalyst disavows and disclaims any obligation to do so, except as required by applicable law.
SOURCE Catalyst Capital Group Inc.
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