Saks Owner Hudson’s Bay Co. Gets Bid to Go Private

A group of shareholders has submitted a CAD 1.74 billion (approximately $1.32 billion) bid to take Hudson’s Bay Co. (HBC), the owner of Saks Fifth Avenue and Lord & Taylor, private.

Leading the group of bidding shareholders, which controls approximately 57% of the company’s common stock, is Hudson’s Bay executive chairman Richard Baker.

“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. … We believe that improving HBC’s performance will require significant time and patient long-term capital that is better suited in a private company context without the emphasis on short-term results and returns,” said Baker in a statement.

HBC owns Canadian department store Hudson’s Bay, Saks Fifth Avenue, and Lord & Taylor, though it is now exploring “strategic alternatives” for the latter chain, including a sale.

Under the terms of the deal, Hudson’s Bay shareholders will receive CAD 9.45 in cash per share, which represents a 48% premium to the stock’s June 7 closing price.

An independent committee of board directors has been formed to evaluate the bid.

The shareholders “have advised the company that they are not interested in an alternative transaction that would result in the sale of the continuing shareholders’ interest in HBC or the acquisition by a third party of HBC or any of its material assets,” said a company statement.

HBC said no decision has been made.

In a separate announcement today, HBC said it was selling its European real estate and retail holdings to partner Signa Holdings for CAD 1.5 billion.

Also in the shareholder group are Rhône Capital L.L.C., WeWork Property Advisors, Hanover Investments (Luxembourg) S.A., and Abrams Capital Management.

HBC sold flash sale e-tailer Gilt Groupe last year, after owning it for only two years.

Top: Saks Fifth Avenue in New York City (image courtesy of Saks Fifth Avenue)

JCK News Director