The Hudson’s Bay Company (HBC), a prominent Canadian owner of luxury department store Saks Fifth Avenue, has recently announced its decision to go private. This move comes after a thorough evaluation process carried out by an independent special committee, which has led to a definitive agreement being reached with a group of shareholders.
If given the green light by regulators and HBC’s other shareholders, the deal will involve the shareholder group, holding a 57% stake in the company, acquiring all remaining common shares of HBC for C$10.30 per share in cash. This offering represents a generous premium of around 62% compared to the closing price of HBC’s shares on the Toronto Stock Exchange in June.
The group of shareholders, fronted by HBC Executive Chairman Richard Baker and inclusive of Rhône Capital LLC and We Work Property Advisors, has raised their initial proposal to secure approval from other HBC shareholders, such as Catalyst Capital and Paradise Developments, who had expressed dissatisfaction with the initial bid.
HBC is facing challenges within the retail industry, having recently sold off its Lord & Taylor banner and made plans to exit the Netherlands market. By transitioning into a private entity, HBC aims to have the financial flexibility necessary to make strategic investments and navigate the evolving retail landscape without the constraints of appeasing public investors.
The latest financial report from HBC revealed a significant net loss in the second quarter of 2019, underscoring the urgency for a change in strategy. Going private could offer the company the chance to concentrate on long-term growth rather than immediate financial outcomes.
The move by HBC to become a private company signifies a pivotal moment in the retailer’s journey and indicates a shift towards strategic investments and sustained growth. The impact of this decision on the future of HBC and its footprint in the retail industry remains to be seen.
For more information on Hudson’s Bay Company and retail industry news, check out the official HBC website and the Retail Dive platform.
