|Bid||8.63 x 0|
|Ask||8.65 x 0|
|Day's Range||8.47 - 8.70|
|52 Week Range||6.22 - 10.76|
|Beta (3Y Monthly)||1.77|
|PE Ratio (TTM)||N/A|
|Earnings Date||Dec. 10, 2019|
|Forward Dividend & Yield||0.05 (0.55%)|
|1y Target Est||10.71|
TORONTO — Some of the most active companies traded Wednesday on the Toronto Stock Exchange:Toronto Stock Exchange (16,939.61, down 11.09 points.)Bombardier Inc. (TSX:BBD.B). Industrials. Down four cents, or 2.08 per cent, to $1.88 on 9.6 million shares.Storm Resources Ltd. (TSX:SRX). Energy. Up six cents, or 4.2 per cent, to $1.49 on 7.9 million shares.Orla Mining Ltd. (TSX:OLA). Materials. Down five cents, or 2.92 per cent, to $1.66 on 7.2 million shares.Aurora Cannabis Inc. (TSX:ACB). Health care. Down 10 cents, or 3.01 per cent, to $3.22 on 7.2 million shares.MEG Energy Corp. (TSX:MEG). Energy. Up 10 cents, or 1.55 per cent, to $6.56 on 5.9 million shares.Canadian Natural Resources Ltd. (TSX:CNQ). Energy. Down 20 cents, or 0.51 per cent, to $38.87 on 5.5 million shares. Companies in the news:Hudson's Bay Co. (TSX:HBC). Down 35 cents or four per cent to $8.43. Glass Lewis is recommending that Hudson's Bay Co. shareholders accept a takeover offer by a group led by the retailer's executive chairman, an opinion that contrasts with a rejection issued earlier by another advisory firm. Glass Lewis said the proposal offers shareholders certainty of value for their HBC shares at a sizable market premium and a relatively attractive valuation. The Richard Baker-led group has offered $10.30 per share, a bid that is less than the $11 per share offered by dissident shareholder Catalyst Capital Group. Glass Lewis said some shareholders may be holding out for the possibility that the group led by Baker might eventually back an alternative offer, but said there was "no compelling evidence" that might happen.WestJet Airlines Ltd. (TSX:WJA). Up 45 cents to $30.98. WestJet Airlines Ltd. shareholders won't be receiving a quarterly dividend this month after Onex Corp. announced the completion of its acquisition of the Calgary-based airline. WestJet and Onex say the payment won't be made because the deal has closed before Dec. 18. The airline's board of directors had declared a 14 cents per share dividend on Oct. 28 to be paid on Dec. 31 to shareholders of record next week. The Toronto-based private equity firm and its affiliated funds say the deal closed following a final regulatory approval Tuesday by the Canadian Transportation Agency that found WestJet continued to meet Canadian ownership and control requirements following its purchase by Onex.Air Canada (TSX:AC). Up 83 cents to $49.39. Transport Minister Marc Garneau said Wednesday he has spoken with Air Canada about problems continuing to plague its new booking system on the cusp of holiday travel season, but that resolving them is beyond his reach. The airline introduced the new reservation system more than three weeks ago, triggering a barrage of social media complaints from passengers who had difficulty accessing their booking information or reaching customer service agents.This report by The Canadian Press was first published Dec. 11, 2019.The Canadian Press
The Ontario Securities Commission will hear a minority shareholder's application to block a privatization bid for Hudson's Bay Co. led by the company's executive chairman as the battle over the company's current value escalates and the voting deadline nears.Dissident shareholder Catalyst Capital Group, which controls about 17.49 per cent of HBC's common shares, filed an application for a hearing with the regulator. It wants the OSC to permanently prohibit the Richard Baker-led group from its proposed HBC takeover priced at $10.30 per share or, at least, amend its information circular and postpone the meeting for shareholders to vote on Dec. 17.An OSC panel granted standing to Catalyst's application at a hearing Wednesday, wrote spokeswoman Kristen Rose in an email.The OSC did so under section 127 of the Ontario Securities Act, which allows the OSC to "initiate proceedings against individuals or companies ... suspected of violating securities law or acting contrary to the public interest," according to its website.Hearings scheduled for Thursday and Friday will address the merits of Catalyst's application and the issues it raises, including alleged misrepresentations made by HBC in its information circular and a flawed process for the privatization bid.The decision came as minority shareholders received conflicting advice on how to vote at the upcoming meeting.Two proxy advisory firms want shareholders to vote for the $10.30 per share offer — a position HBC's board of directors endorsed in late October and the company has since encouraged shareholders to back.Meanwhile, a third proxy advisory firm and a minority shareholder urge shareholders to dissent from the company line. An investment firm that controls about half a per cent of the company's outstanding common shares announced it planned to cast a ballot against the proposal.The deadline to vote by proxy is early Dec. 13, while the special meeting for shareholders to vote is scheduled for Dec. 17. The vote requires approval from a majority of minority shareholders.On Wednesday, Glass Lewis joined Egan-Jones in recommending the privatization transaction to shareholders.The proposal offers shareholders certainty of value for their HBC shares at "a sizable market premium and a relatively attractive valuation," according to its report.The Baker-led group's $10.30 per share offer is higher than the $9.45 per share it initially proposed.Still, it falls 70 cents short of a competing offer from Catalyst.HBC's board rejected the unsolicited offer after Baker's group said it was "not interested in any transaction that would result in a sale of their interests in HBC," according to the company's statement outlining the decision.Catalyst has since said its offer remains open if shareholders reject the bid from the Baker group.Glass Lewis acknowledged some shareholders may be holding out for the possibility that the group led by Baker might eventually back an alternative offer, but said there was "no compelling evidence" that might happen.Without completing the proposed transaction from the Baker-group, Glass Lewis believes "it is reasonable to expect that the company’s share price would experience a substantial decline in value in the immediate term, with any future price recovery subject to further material uncertainty," the firm said.HBC's shares continued their seventh consecutive day of declines Wednesday, closing down 35 cents, or roughly four per cent, at $8.43 on the Toronto Stock Exchange. Since closing at $9.74 on Dec. 2, HBC shares had dropped by $1.31 by the end of Wednesday's trading day. What's the significance of Dec 2?Gabriel de Alba, managing director and a partner at Catalyst, said Glass Lewis ignored all of the issues related to the creation of the Baker Group and buys into the threat that the take under proposed by that group is the only option."ISS recognized these issues and called out the HBC board and the insider group," de Alba said in a statement."We continue to maintain our superior offer and believe there are other alternatives to maximize shareholder value. If the Board will not act in the best interest of all shareholders, Catalyst is prepared to seek Board change to ensure that the interests of minority shareholders are protected."Egan Jones, another proxy advisory firm, also recommended the transaction the day prior. Egan Jones argued the transaction was a desirable approach to maximizing shareholder value.David Leith, chair of the special committee HBC formed to review the privatization proposal, said in a statement that the committee is "pleased" with the recommendations.These recommendations stand in contrast to one issued Monday by Institutional Shareholder Services Inc. It urged shareholders to vote against the bid.ISS raised several concerns about the sale process, including around disclosures and the ability for the special committee to consider other proposals.The special committee called that report "flawed" in a statement.But already one minority shareholder, New York-based Ortelius Advisors L.P., announced Wednesday it planned to vote against the proposal. It also took issue with an updated information circular HBC released to shareholders on Dec. 6., which it said in a statement raised several additional, serious concerns around Baker's activity."The special committee's update just reinforces our decision to vote against Richard Baker's insider bid. There is a lot more troubling information in the release, which raises a whole new set of additional questions," said managing member Peter DeSorcy in a statement.The investment manager filed a lawsuit Dec. 6 at the Ontario Superior Court of Justice in an effort to block the bid and have HBC amend its information circular, which it alleges is misleading.Ortelius controls all decisions related to the buying and selling of Pangaea Venture's L.P.'s securities, including 876,450 of HBC's common shares.The special committee declined to comment on Ortelius's position, while HBC and representatives for the Baker-led group did not immediately respond to a request for comment on the matter.This report by The Canadian Press was first published Dec. 11, 2019.Follow @AleksSagan on Twitter.Companies in this story: (TSX:HBC)Aleksandra Sagan, The Canadian Press
(Bloomberg) -- Hudson’s Bay Co. Chairman Richard Baker’s C$1.9 billion ($1.4 billion) plan to take the Canadian retailer private got a boost from a prominent shareholder advisory firm.Glass Lewis & Co. urged investors in the owner of Saks Fifth Avenue to support the transaction at a shareholder meeting Dec. 17. It argued that there’s no viable alternative deal on the table given that Baker’s group, which owns roughly 57% of the company, said it won’t sell its shares to anyone else.While some shareholders may be holding out for the Baker group to reverse its stance and sell at a higher price, Glass Lewis said that appeared unlikely. In the absence of other viable options, the advisory firm said that Hudson’s Bay’s stock would probably fall further in the face of a challenging retail environment if the deal fails.Catalyst Capital Group Inc., which owns a 17.5% stake in the company, has come out against the deal and offered a counter-proposal to buy Hudson’s Bay for C$11 a share, a 7% premium on the Baker group’s bid. The retailer has rejected the proposal from the private equity firm, arguing it’s not viable because the Baker group has said it won’t sell to another buyer.“We simply see no viable path for the Catalyst proposal to achieve any of the requisite shareholder vote hurdles at this time,“ Glass Lewis said in a report dated Tuesday. “Therefore, we believe it would be nonsensical for the board to terminate the arrangement agreement.”Glass Lewis’s conclusion puts it at odds with another prominent advisor, Institutional Shareholder Services Inc., which last week urged investors to reject the deal. ISS argued that the company offered no clear reason shareholders should accept it when Catalyst has proposed a higher price. Given the defects identified in the sales process, investors could not be confident they are receiving maximum available value for their shares, ISS said.A third shareholder advisory firm, Egan-Jones Proxy Services, has also supported the deal.Hudson’s Bay fell for a seventh straight session in Toronto, down 1.4% to C$8.66 a share as of 9:55 a.m. That’s well below the offer price of C$10.30 a share from the Baker group, as investors fear the deal won’t win the necessary support from a majority of minority holders.Hudson’s Bay said it was pleased Glass Lewis and Egan-Jones supported the deal.“The support of these independent proxy advisors further demonstrates that this transaction represents the best path forward for HBC,” David Leith, chair of Hudson’s Bay’s special committee, said in a statement.Catalyst once again urged shareholders to vote against the deal Wednesday, and said it would seek changes to the board if the company’s independent directors don’t act in the best interest of shareholders.The Canadian private equity firm said the Glass Lewis report ignored all the issues related to the creation of the Baker group and “buys into the threat that the take under proposal by the group is the only option.”“It is somewhat shocking that they would turn a blind eye to all of the conflicts, manipulations and intentionally misleading and incomplete disclosures,” said Gabriel de Alba, Catalyst partner and managing director, in a statement.Catalyst has filed a complaint with the Ontario Securities Commission seeking to block the Baker group’s takeover, which will be heard starting Wednesday in Toronto. Another investor, Ortelius Advisors, which said it owns a 0.5% stake in Hudson’s Bay, has also filed a lawsuit to block the deal.(Updates with additional information from eighth paragraph)To contact the reporter on this story: Scott Deveau in New York at email@example.comTo contact the editors responsible for this story: Liana Baker at firstname.lastname@example.org, Eric Pfanner, David ScanlanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Hudson's Bay Company (TSX: HBC) ("HBC" or the "Company") today announced that Glass Lewis and Egan-Jones have both recommended that HBC shareholders vote "FOR" the transaction in which HBC will become a private company. With this transaction, HBC will be owned by certain continuing shareholders (the "Continuing Shareholders") and the Company’s other shareholders (the "Minority Shareholders") will receive $10.30 per share in cash.
Canada's oldest retailer's strategy will remain the same whether or not it continues as a public company, Hudson's Bay Co. chief executive said as the department-store chain reported sluggish sales in its most recent quarter.HBC shareholders are set to vote next week on a privatization bid, priced at $10.30 per share, led by the company's executive chairman Richard Baker."Over the last month, many have asked if we expect our strategy to change," CEO Helena Foulkes said during a conference call with analysts Tuesday after the company released its third-quarter financial results."In short, the answer is no. Whether we are a public or private company, our strategy remains the same," said Foulkes, highlighting a commitment to making focused investments designed to drive growth, enhancing customer experience, reducing operating costs, fixing fundamentals and capitalizing on real-estate value."These actions are crucial in ensuring we can drive both top- and bottom-line performance over the long term. While this will take time, we're confident in our journey and our promise is to do everything within our power to deliver on the extraordinary heritage and potential of HBC."The takeover has faced increased scrutiny and several roadblocks ahead of the scheduled Dec. 17 meeting where a majority of the company's minority shareholders must vote in favour in order for it to proceed.Proxy advisory service Institutional Shareholder Services has recommended shareholders vote against the offer that a special committee of the HBC board endorsed. The committee rejected a rival bid of $11 by Catalyst Capital Group because it says the Baker-led group, which controls about a 57 per cent take in HBC, is not interested in selling.The comments by Foulkes came as HBC reported its same-store sales, a key retail metric, fell 1.7 per cent for the 13-week period ended Nov. 2."There is no doubt that we wanted more from our third quarter performance as we were up against our most difficult comparison from a year ago," she said."Strong digital sales, continued cost control and inventory management were not enough to overcome headwinds, softening in the luxury category and the challenge of winning back market share in Canada."At Saks Fifth Avenue, the company noted a 2.3 per cent decrease in the quarter compared to a 7.3 per cent jump in the same quarter the previous year.At Hudson's Bay, same-store sales fell 3.9 per cent in the third quarter.The challenges with these chains "are largely self-inflicted," said Foulkes. The company continues working at reimagining the customer experience, she said. In the upcoming spring season, Hudson's Bay will introduce 75 new designers and exit 600 brands, she said, mostly in apparel.The retailer recorded a lift in digital sales with a 15 per cent bump in the quarter. The company has been focused on fixing fundamentals in this area, said Foulkes, including site speed and streamlining the checkout process, among other things.Overall, the company reported a third-quarter loss of $226 million or $1.23 per share compared with a $161 million loss or 88 cents per share a year ago.Revenue totalled $1.84 billion, down from nearly $1.89 billion in the same quarter last year. Meanwhile, retail sales came in at about $1.82 billion for the quarter, down from roughly $1.86 billion in the same quarter the previous year.On what it called a normalized basis, HBC said it lost $128 million in its latest quarter compared with a comparable loss of $56 million a year ago.The takeover fight for HBC is being fought on several fronts including a hearing that was requested by Catalyst at the Ontario Securities Commission that is set for Wednesday.Catalyst, which is encouraging other minority shareholders to reject the Baker-led bid, has asked a regulator to block the privatization bid or, at least require HBC to amend its information circular.A New York-based investment firm has also filed a lawsuit at the Ontario Superior Court of Justice last week, seeking "an order permanently prohibiting" the privatization proposal from proceeding.ISS wrote in its report that the HBC special committee tasked with reviewing the takeover proposals appears to have "handcuffed itself" from deeming another offer superior, which requires the competing bid to be reasonably capable of being completed without undue delay, as the insider shareholder group's opposition makes other transactions not possible to complete.HBC's board of directors called the report "flawed" in a statement.Another proxy advisory firm, Egan-Jones, recommended that shareholders vote for the transaction, arguing it was a desirable approach to maximizing shareholder value."The payment to the minority shareholders pursuant to the arrangement will be all cash, which will provide the minority shareholders with certainty of value and immediate liquidity."This report by The Canadian Press was first published Dec. 10, 2019.Follow @AleksSagan on Twitter.Companies in this story: (TSX:HBC)Aleksandra Sagan, The Canadian Press
The oldest company in Canada, Hudson's Bay Company (TSX:HBC), might be going out of business after 350 years, as its revenue and stock market value plummets.
Hudson’s Bay Co. sales fell in the third quarter, partly due to weakness in the luxury market, as a group led by its executive chairman tries to take the company private.
(Bloomberg) -- Saks Fifth Avenue owner Hudson’s Bay Co. reported another weak sales quarter, giving Chairman Richard Baker ammunition for his contested bid to take the retailer private as shareholders prepare to vote next week.Comparable third-quarter sales, a closely watched metric for the industry, fell 1.7%. At Saks, which had been the group’s bright star in recent quarters, sales fell 2.3%, the first decline in at least eight quarters. Gross margins dropped 120 basis points.Key TakeawaysHudson’s Bay’s lingering malaise despite multiple asset sales, store closures and turnaround efforts plays into Baker’s argument that management will be better off outside the glare of markets as the industry struggles to lure online savvy consumers to brick-and-mortar stores.Hudson’s Bay, which supports the deal led by Baker and his allies, is trying to convince shareholders to vote in favor on Dec. 17. Private-equity firm Catalyst Capital Group Inc., which owns a 17.5% stake and put forth a higher proposal that was rejected, wants to block the sale.A sweeping merchandise dust-off at Hudson’s Bay, the eponymous chain in Canada that’s the oldest company in North America, has yet to bear fruit. Comparable sales dropped 3.9%.Saks OFF 5th, which Hudson’s Bay has tried to turn into a stronger competitor to the likes of Nordstrom Inc.’s Rack, was the lone bright spot, with sales up 4.9%.Saks Fifth, the luxury chain, is showing signs of improvement this quarter, with business “quite strong” in the last eight weeks, Chief Executive Officer Helena Foulkes told analysts Tuesday.Market ReactionCatalyst’s proposal of C$11 a share represents a 6.8% premium to the C$10.30 a share that Baker and his partners agreed to pay in October. Hudson’s Bay’s special committee rejected the Catalyst bid in part because Baker and his allies, who own about 57% of shares, have indicated they won’t sell. HBC dropped for a sixth day in Toronto, down 0.9% to C$8.96. That’s well below both offer prices, suggesting investors are concerned the bids may fail.To contact the reporter on this story: Sandrine Rastello in Montreal at email@example.comTo contact the editors responsible for this story: David Scanlan at firstname.lastname@example.org, Lisa WolfsonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Hudson’s Bay Company (TSX: HBC) ("HBC" or the "Company") today mailed an informational brochure to remind all shareholders to vote FOR the transaction in which HBC will become a private company, owned by certain continuing shareholders (the "Continuing Shareholders"), and the Company’s other shareholders (the "Minority Shareholders") will receive $10.30 in cash per share. The informational brochure is available on the dedicated transaction website HBCGoPrivate.com, which provides additional information and materials related to the take private transaction, including voting instructions. Shareholders can vote directly by clicking the VOTE NOW button.
Hudson's Bay Co. minority shareholders should vote against a privatization bid led by the retailer's executive chairman, says an influential proxy advisory service that points to a rejected, higher-priced offer.Institutional Shareholder Services Inc. recommended minority shareholders vote against the Richard Baker-led bid of $10.30 per share that has received the HBC board's approval. The proxy advisory service raised several concerns about the sale process, including around disclosures and the ability for a special committee formed to review the Baker bid to consider other proposals."Given that significant defects have been identified with the sale process, shareholders cannot be confident they are receiving maximal available value for their shares," wrote ISS in a research note dated Friday.The special committee appears to have "handcuffed itself" from deeming another proposal to be superior, the report reads. It defines superior, in part, as "reasonably capable of being completed without undue delay," according to the report.After Catalyst Capital Group, a minority shareholder that controls about 17.49 per cent of the company's shares, made an unsolicited offer to takeover the company for $11 per share, the committee rejected it because the Baker-led group, which controls about 57 per cent of shares, said they were uninterested in selling.The group's opposition "means the transaction is incapable of being completed," the committee said in a statement at the time."Shareholders must question whether the special committee has effectively tied its own hands," reads the ISS report, which concludes "there is no legitimate rationale from a governance perspective" to recommend accepting a $10.30 per share price "in light of what appears to be a legitimate outstanding" higher offer.Catalyst has said its offer will stand if shareholders reject the Baker-led bid, which they are due to vote on at a special meeting on Dec. 17. The deadline to vote by proxy is Dec. 13."As such, shareholders are advised to vote against the acquisition by the continuing shareholders," concluded the ISS report.The report is "flawed," according to a statement from the HBC board of directors released Monday morning.It, among other things, misunderstands the superior proposal construct, it said."No board of directors, having concluded that an arrangement is in the best interests of the company, would terminate an arrangement agreement in order to enter into an alternative transaction, which is not reasonably capable of completion."The board noted that if a majority of minority shareholders oppose the Baker-led bid, "it will not proceed."It pointed to an acknowledgment by ISS that there is meaningful downside risk if shareholders don't approve the deal.The ISS report notes the special committee recommended the privatization bid partly due to concerns around a deteriorating retail environment, declining real estate portfolio values and other issues."Any of these items, individually or collectively with others, could have further substantial negative effects on the value of HBC shares," ISS wrote.However, it adds that Catalyst's commitment to its bid "helps mitigate the downside risk."The HBC statement indicates only one offer is on the table."The $10.30 per share offer is the only offer available to minority shareholders and provides immediate and certain value at a significant market premium," said David Leith, chairman of HBC's special committee."We continue to strongly recommend that HBC shareholders vote for the take-private transaction."The matter is also before the Ontario Securities Commission and the court.Catalyst has asked a regulator to block the privatization bid or, at least, require HBC to amend its information circular. The OSC is scheduled to hear that matter on Wednesday."Catalyst has been working to protect the interests of the minority shareholders, including offering all shareholders a superior proposal to the Baker Group," said Gabriel de Alba, managing director and partner of Catalyst."We will continue to push the HBC independent directors to finally step up and do their duty to protect shareholders, run a true value maximization process and restrict the coercive and questionable efforts of Richard Baker."Meanwhile, a New York-based investment manager filed a lawsuit at the Ontario Superior Court of Justice Friday to block the bid on behalf of a minority shareholder. Ortelius Advisors L.P. claims the bid forces minority shareholders to sell at "a steep discount."None of the allegations has been proven in court.This report by The Canadian Press was first published Dec. 9, 2019.Follow @AleksSagan on Twitter.Companies in this story: (TSX:HBC) Aleksandra Sagan, The Canadian Press
(Bloomberg) -- Hudson’s Bay Co. disparaged a shareholder advisory firm’s report that came out against Chairman Richard Baker’s plan to take the retailer private, calling the study “flawed” and reiterating a call to support the deal.Institutional Shareholder Services Inc. on Friday urged investors to vote against Baker and his partners’ plans to take the owner of Saks Fifth Avenue private for C$1.9 billion ($1.4 billion). In a statement Monday, HBC’s special committee defended its decision to reject a higher competing offer from one of Hudson’s Bay’s biggest shareholder.The Baker offer “is the only offer available to minority shareholders and provides immediate and certain value at a significant market premium,” said David Leith, the board’s special committee chairman. “ISS acknowledges there is meaningful downside risk if shareholders do not approve this transaction.”Baker and his partners, who collectively own a 57% stake in Hudson’s Bay, reached an agreement to buy the Toronto-based retailer in October for C$10.30 a share. The takeover was unanimously supported by the company’s board and is subject to a vote on Dec. 17 that requires the support of most of the minority holders.The vote pits Baker against private-equity firm Catalyst Capital Group Inc., which owns a 17.5% stake and put forth a rival C$11-a-share proposal. The special committee rejected it as “not reasonably capable of being consummated” because Baker and his allies don’t intend to sell their stake, which would in effect kill the offer.In its report, ISS said Hudson’s Bay offered no clear reason why shareholders should accept the deal when Catalyst offered a higher price. Hudson’s Bay disputed ISS’ rationale, saying an offer is only superior if it can reasonably be completed.“To terminate the existing agreement otherwise would leave shareholders without the ability to vote on the transaction contemplated by the existing agreement, and with no prospect of having their shares acquired in another transaction,” the committee said.To contact the reporter on this story: Sandrine Rastello in Montreal at email@example.comTo contact the editors responsible for this story: David Scanlan at firstname.lastname@example.org, Lisa Wolfson, Jonathan RoederFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The Special Committee of the Board of Directors of Hudson's Bay Company (TSX: HBC) ("HBC" or the "Company") today commented on the flawed report from Institutional Shareholder Services ("ISS") regarding the proposed transaction in which HBC will become a private company owned by certain continuing shareholders (the "Continuing Shareholders") and the Company’s other Shareholders (the "Minority Shareholders") will receive $10.30 per share in cash.
- ISS Identifies Numerous Issues and Conflicts, Including Lack of Disclosures and Defects in Sales Process, by Richard Baker , the Insider Group and the HBC Board of Directors TORONTO , Dec. 7, 2019 /CNW/ ...
The bid to take Canada's oldest retailer private faces another obstacle as a minority shareholder seeks to block the proposal, led by Hudson Bay Co.'s executive chairman Richard Baker, in court.The group behind the $10.30 per share bid is "seeking to take HBC private at a steep discount, depriving minority shareholders ... of fair value for their shares," according to a lawsuit filed by Pangaea Ventures L.P. and Ortelius Advisors L.P. at the Ontario Superior Court of Justice Friday.New York-based Ortelius is an investment manager that controls all decisions related to the buying and selling of Pangaea's securities, including its 876,450 of HBC's common shares that account for 0.476 per cent of the company's outstanding common shares."The defendants have deliberately engaged in actions that have prevented a fair expression of HBC's market price through the deliberate timing of disclosures, misleading information and a structured bid that permits no competition," the document reads.HBC, Baker and Rupert Acquisition Ltd. — which represents the shareholders behind the privatization bid — are listed as defendants.None of the claims have been proved in court.The suit calls for "an order permanently prohibiting" the Baker-led group's privatization proposal from going forward and an amendment to the company's information circular, which it alleges is misleading.HBC and the shareholder group, which controls about 57 per cent of HBC's common shares on an as-converted basis, reached an agreement in October for the company to be taken private after the group upped its offer from $9.45 per share to $10.30.Since then, the company has been vocal about reminding its minority shareholders to vote for the proposal at an upcoming Dec. 17 meeting. For the deal to succeed, a majority of minority shareholders — not including those behind the deal — must vote in favour.A spokesperson for the plaintiffs declined to confirm how Ortelius plans to vote. But the lawsuit alleges shareholders are being "forced to sell their shares at a steep discount."It claims Baker led a "secret and oppressive" campaign to privatize HBC and as of 2017, "had his eye on his own advantage."Baker, who ought to have recused himself from his role when he first advised HBC's board of his intention in the spring of 2017, structured transactions to advantage his plan, it claims.He, for example, timed announcements to cap the price of the company's shares, documents read. When HBC announced in June it sold the balance of its European joint venture assets for $1.5 billion, the company's stock ought to have at least doubled, according to the suit."Baker deliberately prevented news of this monumental transaction from being absorbed by the market," it reads, by announcing his initial $9.45 per share privatization bid shortly afterwards."This announcement effectively put a ceiling on the value of HBC shares."The company also issued an information circular "purposely designed to convey a pessimistic view of the company," according to the suit, which contradicts the optimistic view HBC expressed prior to Baker's bid. It also allegedly undervalues HBC, including its most valuable asset, the flagship Saks Fifth Avenue location in New York City by at least $2 billion.That view intends to justify the offer price per share and dissuade competing bids, it reads.Baker also put structures in place to ensure that any privatization-bid oversight "would be handcuffed in terms of attracting any competing proposals," the lawsuit claims.In late November, Catalyst Capital Group Inc. made an unsolicited competing offer of $11 per share. HBC's special committee rejected it in early December after the Baker-led group said it was "not interested in any transaction that would result in a sale of their interests in HBC," according to an HBC press release.The lawsuit alleges the Catalyst offer "is clearly superior" at 70 cents higher, but the special committee confirmed it can not view any other bid as superior as the Baker-led group refuses to sell its shares."There is no mechanism for the minority shareholders to receive fair market value for their shares because there is no mechanism for anything approaching a fair, free, open and transparent competitive market for the common shares."In a release late Friday, the special committee of the board of Hudson’s Bay refuted the lawsuit. "Contrary to the baseless allegations being made by The Catalyst Capital Group Inc., the special committee of the company’s board of directors conducted a rigorous and thorough process," the release said.The committee said Baker received permission to explore the possibility of developing a take-private proposal with other large, long-term shareholders of the company, and to share information on a confidential basis.It said in the context of declining stock price and the ongoing challenges and risks facing the company, a proposal that would provide liquidity to minority shareholders could be in the best interests of the company, and to recommend such a proposal to shareholders.The committee said any such transaction it might recommend would be subject to minority shareholder approval and other protections under applicable corporate and securities laws.The matter is also before the Ontario Securities Commission after Catalyst, which controls about 17.49 per cent of HBC's common shares, requested a hearing to block the bid. The OSC hearing is scheduled to begin on Dec. 11.Catalyst wants the OSC to block the privatization bid or, at least, require HBC to amend its information circular.The Baker-led group has said in a letter to HBC's special committee that has been made public that it filed a complaint to the OSC, but the OSC could not confirm that due to policies intended to protect the integrity of investigations.This report by The Canadian Press was first published Dec. 6, 2019.Follow @AleksSagan on Twitter.Companies in this story: (TSX:HBC)Aleksandra Sagan, The Canadian Press
The Special Committee of the Board of Directors of Hudson’s Bay Company (TSX:HBC) ("HBC" or the "Company") today provided additional information regarding the background to the European real estate transactions (the "SIGNA Transactions") that led to the development of the privatization transaction contemplated by the Arrangement Agreement between HBC and Rupert Acquisition LLC dated October 20, 2019 (the "Arrangement Agreement").
A group of shareholders of Hudson’s Bay Company (TSX:HBC) ("HBC" or the "Company"), who collectively own approximately 57% of the outstanding common shares of HBC on an as-converted basis (collectively the "Continuing Shareholders"), today issued an investor presentation reiterating the compelling reasons for HBC’s minority shareholders to support the proposed arrangement to take HBC private for $10.30 per share in cash.
HBC (TSX: HBC) will announce financial results for the third quarter 2019 on Tuesday, December 10, 2019 before market hours. Chief Executive Officer Helena Foulkes, and Interim Chief Financial Officer Becky Roof will subsequently host a conference call to discuss the company’s results at 8:30 a.m. ET.
Hudson’s Bay Company (TSX: HBC) ("HBC" or the "Company") today mailed an informational brochure and launched www.HBCGoPrivate.com to encourage all shareholders to vote FOR the transaction in which HBC will become a private company, owned by certain continuing shareholders (the "Continuing Shareholders"), and the Company’s other shareholders (the "Minority Shareholders") will receive $10.30 in cash per share. The take-private transaction was unanimously recommended by the independent Special Committee of the Board of Directors (the "Special Committee") and determined by the Board (excluding conflicted directors) to be in the best interest of HBC and fair to Minority Shareholders.
A group of shareholders of Hudson’s Bay Company (TSX: HBC) ("HBC" or the "Company"), who collectively own approximately 57% of the outstanding common shares of HBC on an as-converted basis (collectively the "Continuing Shareholders"), today issued the following statement:
(Bloomberg) -- Hudson’s Bay Co. is optimistic shareholders will endorse a take-private offer from its chairman when it comes to a vote this month, according to the chairman of a special committee formed by the struggling retailer.“We are confident in the end that we will get the vote because it’s a rational decision to make,” said David Leith, the head of the committee reviewing the chairman’s bid as well as a competing offer from one of Hudson’s Bay’s biggest shareholders.The Dec. 17 shareholder vote pits Chairman Richard Baker, whose bid was backed by the board in October, against private-equity firm Catalyst Capital Group Inc., which made a higher offer that was rejected by Leith’s committee as “not reasonably capable of being consummated.” Catalyst wants to block the Baker deal, which requires support of the majority of minority shareholders.Leith, who spoke publicly for the first time since the committee was formed, said he’s concerned the complexity of the transaction and the barrage of statements between the rival bidders has made it hard for retail investors to make up their mind.The board has supported the Baker offer to turn the owner of Saks Fifth Avenue around outside the glare of public markets as retailers try to find relevance in the era of e-commerce. Fixes will take a while and be expensive, said Leith, a former investment banker at Canadian Imperial Bank of Commerce.“This was not a circumstance where we came up and said ‘we want to sell Hudson’s Bay and we want the best offer,’” he said. “This was the circumstance where an insider said ‘we are committed to the long term of Hudson’s Bay.’”Catalyst OfferCatalyst’s proposal of C$11 a share represents a 6.8% premium to the C$10.30 a share that Baker and his partners agreed to pay in October. The special committee rejected the Catalyst bid in part because Baker and his allies, who own about 57% of shares, have indicated they won’t sell. HBC declined for a second day Wednesday, closing at C$9.24 in Toronto. That’s well below both offer prices, suggesting investors are concerned the bids may fail.“The controlling shareholders never put the company up for sale, nor did we put the company up for sale,” Leith said in a phone interview Wednesday.The Baker group’s bid to win over the bulk of minority holders could prove challenging with Catalyst holding 17.5% of the common stock. Only the common shares are subject to the vote by minority holders, according to a regulatory filing.As of the record date, there were roughly 184 million common shares outstanding, of which the Baker group held about 83.6 million, or 45.3%, the filing shows. That leaves roughly 100 million shares that will be counted, of which Catalyst owns about 32.3%.Catalyst, the distressed debt firm run by Newton Glassman, has appealed to the Ontario Securities Commission to halt the Baker offer, which they say was made with “inadequate and inaccurate” disclosure to shareholders. The regulator has agreed to hold a hearing on the matter Thursday in Toronto.To contact the reporter on this story: Sandrine Rastello in Montreal at email@example.comTo contact the editors responsible for this story: David Scanlan at firstname.lastname@example.org, Jonathan RoederFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.