Hudson’s Bay buying Saks for $2.9 billion

TORONTO & NEW YORK—Hudson’s Bay Company, the owner of Lord & Taylor and Canada’s Hudson’s Bay department store, will buy Saks Inc. for $2.9 billion ($16 per share). If the Saks Inc board approves the deal, it could close by the end of the year.

“This exciting portfolio of three iconic brands creates one of North America’s premier fashion retailers,” said Hudson’s Bay CEO Richard Baker in a statement. “I’ve had a long connection with Saks over the years, and am thrilled to bring one of the world’s most recognized luxury retailers into the HBC family. With the addition of Saks, HBC will offer consumers an unprecedented range of retailing categories and shopping experiences. This acquisition will increase our growth potential both in the U.S. and Canada, generate significant efficiencies of scale, add to our powerful real estate portfolio and deliver substantial value to our shareholders.”

Saks CEO Steve Sadove added, “We believe this transaction delivers compelling value to our shareholders and that Saks Fifth Avenue is an excellent fit within the HBC organization. We also believe that HBC recognizes the tremendous value of our people, our real estate, our customer and vendor relationships, and most importantly the power and potential of our iconic brand. The $16 per share price represents an approximate 30 percent premium to the May 20, 2013 closing price, the day before media speculation began. We have made significant progress over the past few years to position Saks for future growth and to evolve into an omni-channel retailer. We are excited about what this opportunity and being part of a much larger enterprise can mean for the future of the Saks Fifth Avenue brand.”

More details on this emerging story to follow.