Hudson’s Bay Inches Closer To Go-Private Deal

Hudson's Bay

After an investor group raised its offer, Hudson’s Bay Co. has inched closer to leaving the public markets. The retailer said it has inked a deal that would let a shareholder group headed up by the chairman of Hudson’s Bay to take the firm private in an arrangement worth roughly $1.9 billion, The Wall Street Journal reported.

The board of the company recommended the deal, and shares of the company closed Friday at C$9.45 per share. Its stock has climbed 30 percent this year so far, with news of the go-private arrangement as a driver.

A shareholder group, with the inclusion of Hudson’s Bay Executive Chairman Richard Baker, WeWork Property Advisors, Rhône Capital LLC and others agreed to pay $7.84 or 10.30 Canadian dollars in cash for shares outstanding.

As it stands, the buyer group owns 57 percent of shares outstanding the firm. The accepted offer is said to be 9 percent more than one the group put forward in June. At the time, it valued Hudson’s Bay at C$9.45 a share.

Hudson’s Bay has grappled with consumer preferences that are changing amid the growth of eCommerce, which has made new challenges for department store retailers. Some investors had objected to the previous arrangement, noting that it undervalued the firm along with its real estate holdings.

Hudson’s Bay’s board said of the deal, according to the report, that the new arrangement would provide a good value to minority shareholders in a retail environment that is deteriorating. The deal must be approved by three-quarters of shares voted at a shareholder meeting that is believed to take place in December.

Chairman Richard Baker previously said in announcing the bid, as reported in June, “While we continue to believe in HBC’s long-term potential, it has become clear that the significant challenges, risks and uncertainties facing HBC in the rapidly evolving retail environment are best addressed in a private market setting.”


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