The special committee of directors created by Hudson's Bay Co. to evaluate the takeover bid of an investor group has commented on the unsolicited offer of private equity firm Catalyst Capital Group Inc. to take a C$150 million stake in the company in order to oppose the buyout proposal.
The committee said Catalyst's offer is not a formal takeover bid and therefore does not provide shareholders with certain protections that are required in formal buyout proposals. It said it is not in a position to make a recommendation regarding the potential share acquisition by Catalyst but advised shareholders to exercise caution in making a decision to tender to the offer.
In July, Catalyst submitted an offer to acquire up to 14,836,795 Hudson's Bay common shares for C$10.11 each, which accounts for an approximately 7% premium to the shareholder group's buyout proposal. The offer expires Aug. 16, earlier than the expected September completion of the formal valuation being prepared under the supervision of the special committee.
If Hudson's Bay reaches an agreement with the investor group looking to privatize the company, the transaction will need the approval of a majority of minority shareholders of the company. It is possible for Catalyst to control a meaningful portion of the common shares held by minority shareholders if all common shares subject to Catalyst's offer are taken up and paid for.
The committee has invited representatives of select shareholders to meet next week to discuss the proposals.