Hudson's Bay Co.'s Executive Chairman Richard Baker may abandon the take-private deal due to a delayed vote on the matter after complaints by its third-largest individual shareholder Catalyst Capital Group, Bloomberg News reported Dec. 15, citing an internal memo.
The Ontario Securities Commission on Dec. 13 granted the Canadian private equity firm's request to require Hudson's Bay to amend and resend to shareholders its management information circular dated Nov. 14. The commission also complied with the request that the Canadian retailer postpone its Dec. 17 shareholders meeting to vote on the take-private deal. Catalyst Capital owns a 17.5% stake in Hudson's Bay.
The investor group led by Baker wrote in a memo to advisers that it is considering its next steps, "including terminating the transaction," according to Bloomberg.
In addition, sources told the news wire the investor group had also failed to secure necessary support from investors to proceed with the privatization offer after preliminary tallies. The deal reportedly needs backing of a majority of the company's minority shareholders.
The news comes only four days after proxy advisers Glass Lewis and Egan-Jones extended their support for the C$1.9 billion offer worth C$10.30 per share deal proposed by Baker-led group. However, another adviser group, Institutional Shareholder Services, and minority shareholder Ortelius Advisors LP recommended shareholders to oppose the deal because it was lower than the unsolicited offer of Catalyst Capital Group.
Hudson's Bay did not immediately respond to S&P Global Market Intelligence's request for comment.