A fight has broken out over retailer Hudson’s Bay Co. (TSX:HBC)
The venerable Canadian retailer’s largest shareholder has made a bid that values the Hudson’s Bay chain of department stores at more than $2 billion, higher than a rival offer from the company’s chairman.
Catalyst Capital Group Inc., which holds a 17.5% stake in the owner of Saks Fifth Avenue, offered $11 a share in cash on Wednesday for the company. Its bid is fully financed and would be subject to customary due diligence, Catalyst said. The proposal represents a 6.8% premium to the $10.30 a share that Hudson’s Bay Chairman Richard Baker and his partners agreed to pay for the company in October.
Catalyst Capital Group is urging shareholders to vote against the Baker bid at an upcoming December 17 meeting. The Canadian private equity firm believes a deal could be voted on and closed by February.
Catalyst, a Toronto-based investment firm run by Newton Glassman, has opposed the Baker bid, saying it undervalues the department store chain. Catalyst is concerned about the value the company has recently ascribed to its real estate, which amounted to about $8.75 a share. In particular, it’s questioning why the value of its flagship Saks Fifth Avenue store fell sharply in a recent appraisal.
Hudson’s Bay’s share price rose 13% to $7.49 U.S. on the news in New York trading, giving the company a market value of about $1.4 billion U.S.
