Hudson’s Bay Company (HBC) chairman Richard Baker is stepping in with a cash bid valued at about Canadian $1.74 billion (U.S. $1.31 billion) to take the company private.
Baker is teaming up with investors, including Rhone Capital and WeWork Property Advisors, to offer Canadian $9.45 a share for the remaining stock of Hudson’s Bay. The group owns about 57 percent of the company’s outstanding common shares, and the offer represents a 48 percent premium to the retailer’s closing share price on Friday, the investors said in a statement.
The offer, if successful, would be a next step in chief executive officer Helena Foulkes’s everything-is-on-the-table approach to turning Hudson’s Bay around. The company has already divested flash-sale website Gilt, slashed costs by cutting jobs, unloaded a minority stake to Rhone Capital and sold its iconic Lord & Taylor building in Manhattan to WeWork for $850 million.
In a separate announcement, Hudson’s Bay said it is cashing out of its European operations — to the tune of Canadian $1.5 billion. The Toronto-based retailer said it reached an agreement with its partner Signa Holding GmBH to take over the companies’ German real estate and retail joint venture. Part of the proceeds will be used to strengthen the company’s balance sheet by paying down a term loan.
The bid to go private is dependent on the deal with Signa, which is expected to close this fall. The shareholder deal would allow Baker and his partners to continue the company’s turnaround efforts outside the glare of public markets.
“This agreement is an exciting milestone for HBC as it will deliver important financial and strategic benefits,” said Foulkes. “Financially, it provides us with the best opportunity to capitalize on our German real estate and allows us to further strengthen our balance sheet. Strategically, we will be able to fully focus our resources on HBC’s North American operations, including our best growth opportunities – Saks Fifth Avenue and Hudson’s Bay. This transaction is another bold action that unlocks the value of our real estate and demonstrates our resolve to creating a stronger, more capable HBC.”