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Catalyst seeks to block HBC take-private bid
Posted on Tuesday, 23 July 2019 13:49
Catalyst Capital is proposing to block a takeover of Hudson’s Bay (HBC) tabled by the current chairman and his partners last month by acquiring CAD 150.00 million-worth (USD 114.64 million) of shares in the listed department store operator. The Canadian private equity investment firm’s offer of CAD 10.11 apiece for as many as 14.84 million common scrips will run until 16th August. Its proposal equates to a premium of 7.0 per cent to the buyout bid of CAD 9.45 each announced on 10th June, about 59.0 per cent to the last unaffected closing price on 7th June and 52.0 per cent to the 30-day volume weighted trading price. Catalyst said it believes the insider offer led by Richard Baker “greatly undervalues the company across each of its real estate, retail and iconic brand attributes”. Furthermore, the controlling insiders are only using shareholder capital and assets to buy out the minority owners at a price that does not reflect fair value. Catalyst is urging the special committee, formed to evaluate the June takeover offer, to explore alternatives that will be in the best interest of all stockholders in the near- or long-term. The private equity house is believed to have bought a significant portion of the 10.0 per cent HBC stake sold off by Ontario Teachers’ Pension Plan Board last month. However, according to the Globe and Mail, this equity interest is not enough to block the proposed takeover, which needs the approval of the majority of stock not controlled by the Baker-led consortium. The newspaper noted activities opposing the buyout include Land & Buildings Investment and Sandpiper, though other supporting the proposal range from Rhone Capital to WeWork Property Advisors. © Zephus Ltd