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Hudson's Bay agrees to improved take-private bid by majority shareholders


According to Market Intelligence, December 2022


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Hudson's Bay agrees to improved take-private bid by majority shareholders

Hudson's Bay Co. said Oct. 21 that it agreed to a revised take-private deal proposed by a group of its shareholders, who own a total of 57% of the company.

The Ontario-based department store chain said the shareholder group, which includes Governor and Executive Chairman Richard Baker, Rhone Capital LLC, WeWork Property Advisors LLC, Hanover Investments (Luxembourg) SA and Abrams Capital Management LP, raised its offer price to C$10.30 per share from the C$9.45 per share offered June 10. The revised bid represents a premium of about 62% to Hudson's Bay closing share price on the Toronto Stock Exchange on June 7.

"Following this comprehensive evaluation and extensive negotiations with the shareholder group, and consideration of the applicable risks and the opportunities and alternatives available, we are pleased to have reached an agreement with respect to a transaction that provides immediate and fair value to the minority shareholders," David Leith, chair of the Hudson's Bay special committee, said in a statement.

The special committee was set up by Hudson's Bay's board of directors to review the offer, which was opposed by private equity firm Catalyst Capital Group and real estate developer Paradise Developments.

The committee added that it recommends minority shareholders to vote in favor of the revised proposal at the company's upcoming special shareholder meeting scheduled for December.

Shares of Hudson's Bay rose 6.4% to C$10.05 following the announcement.

J.P. Morgan is acting as lead financial adviser to the Hudson's Bay special committee, with Centerview Partners serving as special adviser. Blake Cassels & Graydon LLP is acting as its Canadian legal adviser and Paul Weiss Rifkind Wharton & Garrison as its U.S. legal adviser.

BofA Merrill Lynch and RBC Capital Markets are acting as financial advisers to the shareholder group, with Stikeman Elliott LLP serving as its Canadian legal adviser and Willkie Farr & Gallagher LLP as its U.S. legal adviser.