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Catalyst buys 10% of Hudson's Bay, blocking investor group's go-private offer

Canadian private equity firm Catalyst Capital Group said Aug. 19 that it received and accepted for purchase approximately 10.05% of Hudson's Bay Co.'s stock from the retailer's shareholders, blocking the proposed privatization offer of an investor group.

Catalyst has accepted a total of 18,491,502 shares for purchase at C$10.11 per share in cash for a total consideration of about C$187 million. The firm proposed to acquire approximately 10.75% of the company for about C$200 million in a bid to block a going-private offer by a Hudson's Bay investor group, which included Governor and Executive Chairman Richard Baker.

It expects to complete the transaction within three business days.

Catalyst's per-share offer represented a 6.98% premium to the investor group's C$9.45 per-share proposal. Hudson's Bay had earlier described the group's proposal as "inadequate."

The firm maintains that Hudson's Bay's special committee should "reject any effort by the controlling shareholders of the company and certain other insiders ... to disenfranchise the company's minority owners."

Catalyst added that it will continue to work with the department store chain to explore alternatives to maximize shareholder value, whether through a sale process, dividend distribution or otherwise.

Hudson's Bay's stock jumped as much as 9.28% to C$10.25 following Catalyst's announcement.