Hudson’s Bay Exits Germany, Considers Acquisition Proposal

As the corporate board reviews a privatization bid, Hudson’s Bay entered into definitive agreements to sell its remaining stake in its German real estate joint venture and divest a related retail joint venture to its partner, Signa, for $1.5 billion.

The company said its board of directors has formed a special committee of independent directors to review the proposal from a group of HBC shareholders for the privatization of the company at a price per share of about $7.12. The group of HBC shareholders submitting the proposal includes individuals and entities related to or affiliated with Richard Baker, HBC governor and executive chairman, Rhône Capital, WeWork Property Advisors, Hanover Investments of Luxembourg, and Abrams Capital Management. The group owns about 57% of HBC outstanding common shares.

The department store retailer also said it pursuing strategic alternatives for the Lord & Taylor business.

As part of the overall divestiture transaction, HBC will assume ownership of the Netherlands retail business and release Signa from its designated Hudson’s Bay Netherlands obligations. Signa will assume HBC’s German liabilities. HBC has retained a financial advisor to review options for the Netherlands business. As it pursues options, HBC stated that it expects to undertake cost savings initiatives including certain store closures. The retailer expects the transaction to close in the fall.

Helena Foulkes, Hudson’s Bay CEO, said, “This agreement is an exciting milestone for HBC as it will deliver important financial and strategic benefits. Financially, it provides us with the best opportunity to capitalize on our German real estate and allows us to further strengthen our balance sheet. Strategically, we will be able to fully focus our resources on HBC’s North American operations, including our best growth opportunities: Saks Fifth Avenue and Hudson’s Bay. This transaction is another bold action that unlocks the value of our real estate and demonstrates our resolve to creating a stronger, more capable HBC.”