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Catalyst could bid for Hudson’s Bay: Reuters
Posted on Thursday, 21 November 2019 16:29
Private equity investor Catalyst is considering an approach for US department store operator Hudson’s Bay, according to Reuters. Citing people with knowledge of the matter, the news provider said the firm was in the process of looking for financing to bid for the company, which is well-known as the owner of Saks Fifth Avenue. If the private equity investor does look to buy the business, it will not be short of competition, with a consortium headed by Hudson’s Bay executive chairman Richard Baker having already agreed to pick up the group in a CAD 1.08 billion transaction. That deal would effectively take the firm private via a share buyback, with Hudson’s Bay repurchasing stock amounting to 43.0 per cent of its outstanding capital for cancellation. This would leave Baker’s consortium, which currently owns 57.0 per cent of the business, as the sole owner. However, Catalyst is claiming that 28.2 per cent of Hudson’s Bay shareholders are opposed to the transaction on the grounds that it undervalues the company. As such, the investor is hoping that by making an approach, it will encourage the firm to consider searching for a better offer. Baker’s consortium has already intimated that it would attempt to block any competing deal. Reuters’ sources, who did not wish to be identified as the matter is confidential, noted that there is no guarantee that the private equity investor will be able to mount a bid for the company. None of the parties involved have commented on the report. Hudson’s Bay has been publicly traded on the Toronto Stock Exchange since November 2012. The firm was established in 1670 and as such, claims to be the oldest company in North America. It employs around 40,000 people across its more than 300 stores; in addition to Saks Fifth Avenue, its businesses include Lord + Taylor and Saks OFF FIFTH. Zephyr, the M&A database published by Bureau van Dijk, shows that the largest deal targeting a department store operator to have been announced worldwide since the start of this year is ESL Investments’ USD 5.20 billion takeover of Sears’ assets, which closed in February. © Zephus Ltd