Hudson’s Bay Company has entered into a definitive agreement with a group of HBC shareholders to take the company private.
Under the terms of the deal, the common shares of HBC not held by the shareholder group (who collectively own approximately 57% of the common shares of the company on an as-converted basis), will be purchased for cancellation at a price of $10.30 per share in cash. This price represents a premium of approximately 62% to HBC’s closing share price on the Toronto Stock Exchange on June 7, 2019, the last trading day prior to the announcement of the shareholder group’s initial privatization proposal, and a premium of approximately 52% to the 20-day average closing share price on that date. The price also represents an increase of 9% over the shareholder group’s initial proposal on June 10, 2019, of $9.45 per share.
The shareholder group comprises individuals and entities related to, or affiliated with, Richard Baker, governor and executive chairman of HBC; Rhône Capital; WeWork Property Advisors; Hanover Investments S.A.; and Abrams Capital Management.
David Leith, chair of the special committee, Hudson’s Bay, said, “Over the last four months, with the assistance of our independent financial and legal advisors, we have conducted a thorough evaluation of the shareholder group’s proposal and alternatives available to HBC to maximize shareholder value. 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. The special committee is confident that this transaction represents the best path forward for HBC and the minority shareholders.”
Completion of the transaction is subject to a number of conditions, including court approval, receipt of certain regulatory approvals and the approval of a majority of the minority of the HBC shareholders and approval of holders of 75% of the shares voted at the special meeting of shareholders held to approve the transaction. HBC expects to mail an information circular for the special meeting in November 2019, and to hold the special meeting in December 2019.