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Hudson’s Bay Co. Agrees to Go Private on Increased Investor Group Bid

Samantha McDonald

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Saks Fifth Avenue parent Hudson’s Bay Co. is going private.

The Canadian company has announced that a group of shareholders — including chairman Richard Baker, as well as Rhône Capital LLC and WeWork Property Advisors — agreed to pay $CA10.30, or $7.84, per share in cash for the remaining shares it doesn’t already own. (The buyer group collectively holds 57% of the company’s common shares.)

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The new price represents a roughly 62% premium to the retail firm’s closing share price on the Toronto Stock Exchange on June 7 — the last trading day prior to the announcement of the group’s initial proposal.

It is also 9% higher than the bid of $CA9.45 per share made on June 10, when HBC formed a special committee to review its take-private bid and announced that it would pull out of its European operations.

Over the last four months, HBC had been conducting an evaluation of the shareholder group’s proposal and other alternatives. In a statement, David Leith, chair of the special committee, said, “Following this comprehensive evaluation and extensive negotiations with the shareholder group, and consideration of the applicable risks and the opportunities and alternatives available, we are pleased to have reached an agreement with respect to a transaction that provides immediate and fair value to the minority shareholders.”

The offer comes during a period of turbulence at Hudson’s Bay Co. Deep markdowns, a shrinking physical footprint and the broader shift to e-commerce have weighed on the business. In its second quarter, the company’s losses widened to $CA462 million, or $350 million.

In August, HBC also announced that it had entered into a deal to sell the storied Lord & Taylor to fashion rental service Le Tote for $CA99.5 million, or $75 million. The acquisition, which is expected to close before the start of the holiday season, would allow the company to focus its resources on its North American operations, including better-performing banners Saks Fifth Avenue and Hudson’s Bay.

Meanwhile, HBC is also reportedly partnering with Authentic Brands Group on that company’s proposed bid for Barneys New York amid its bankruptcy proceedings. The auction to decide the fate of Barneys is scheduled for Oct. 24.

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