Canadian department store chain Hudson's Bay Co. agreed with a group of shareholders to be taken private in an improved deal, in which the company will acquire stock held by minority shareholders at C$11 per share in cash.
Private equity firm Catalyst Capital Group, the company's largest minority shareholder with a 17.48% stake, will vote in favor of the transaction, according to a Jan. 3 release. A special shareholders meeting will be held in February to approve the deal.
In October 2019, the Saks Fifth Avenue owner agreed to a C$10.30-per-share offer from a consortium led by Executive Chairman Richard Baker that owns a combined 57% stake in the company.
In November 2019, Catalyst Capital countered Baker's group with a bid of C$11 per share, but it was rejected by Hudson's Bay as it was unlikely to receive the necessary shareholders' approval.
Baker and his partners recently approached the company's minority shareholders, including Catalyst Capital, to sweeten their offer as they reportedly need a majority of minority shareholders for a deal.
The special committee of Hudson's Bay's board requested TD Securities Inc. to prepare an updated valuation and fairness opinion. The company said it has the right to scrap the deal if TD Securities provides a valuation range with a lower end that exceeds C$11 per share, or if the new fairness opinions have not been received by Feb. 14.
Catalyst can also withdraw its support if the amended management information circular has not been filed on SEDAR and mailed to shareholders by Feb. 14, does not include the new fairness opinions or the updated valuation states that the lower-end range of the company's fair market value is equal to or less than C$11 per share.