Hudson’s Bay Co. is selling its European operations for $1.5 billion as a group of investors led by chairman Richard Baker looks to take the retailer private with a cash bid valued at about $1.74 billion.
Hudson Bay Company chairman Richard Baker
Baker and investors including WeWork Property are offering $9.45 a share for the remaining stock of Hudson’s Bay. The shareholder group owns about 57 per cent of the outstanding common shares of HBC. The offer represents a 48 per cent premium to the retailer’s closing share price on Friday, the investors said in a statement.
HBC shares spiked more than 45 per cent to $9.20 in early trading. The stock was halted earlier pending news.
Separately, the company said it had reached an agreement for 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.
Key Takeaways
Baker’s bid, if successful, would allow the company to continue its turnaround efforts outside the glare of private markets. Hudson’s Bay said it has formed a special committee to review the proposal. “No decision has been made and it intends to carefully and thoroughly review the proposal with the assistance of its outside financial and legal advisers,” the retailer said after the take-private bid was announced.
Meanwhile, chief executive Helena Foulkes said the deal to sell the European assets allows the company to “fully focus our resources on HBC’s North American operations, including our best growth opportunities — Saks Fifth Avenue and Hudson’s Bay.” The European deal is the latest step in Foulkes’s everything-is-on-the-table approach, which has included selling flash-sale website Gilt and earlier merging its European operations with a rival department-store chain.
Market Reaction
Hudson’s Bay shares’ trading was halted in Canada on Monday. The stock has lost almost two thirds of its value since the company’s 2012 initial public offering, closing at $6.37 last week.
