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HBC Might Not Go Private After Chairman’s Bid Is Reportedly Shy of Votes

Updated

Hudson’s Bay Co. confirmed that it has postponed a meeting set for Dec. 17, when shareholders were expected to vote on chairman Richard Baker’s all-cash offer to take the company private.

In a statement, the Canada-based firm said it intends to schedule a new date for the meeting “as soon as practicable.”

What We Reported (Dec. 16, 9:30 a.m. ET)

Hudson’s Bay Co. might not be going private after all.

According to a source speaking with FN’s sister publication WWD, the bid led by chairman Richard Baker and the majority shareholders that collectively own 57% of the company’s common shares has not received enough votes for approval. It required more minority shares in favor of its proposal for it to pass.

In October, Baker’s consortium of investors, which includes Rhône Capital LLC and WeWork Property Advisors, offered to pay CA$10.30 ($7.86) per share in cash for the remaining shares it doesn’t already own.

Watch on FN

A month later, Catalyst Capital Group Inc., which owns 17.5% of HBC, announced that it has offered CA$11 ($8.29) per share in cash for all common shares of the Canadian retailer. Baker’s group then urged HBC’s special committee early this month to either accept its offer or remain investors in HBC as a public company. Both parties have also filed complaints against one another with the Ontario Securities Commission.

A final tally of the voting on the bid had been scheduled for tomorrow in Toronto, but a source told WWD that the shareholder meeting has been cancelled. FN has reached out to HBC for comment.

The move brings to mind fellow department store chain Nordstrom’s go-private bid. In March last year, the Nordstrom family offered to take the Seattle-based company private for roughly $8.4 billion, but the bid was rejected by a special committee of the retailer’s board, who said the offer was too low. The family group argued that the cash offer of $50 per share represented a premium of about 24% on the company’s stock price when it announced its intention to go private in June 2017.

Less than a week ago, HBC posted its financial results for the three months ended Nov. 2, widening its net losses to $CA226 million ($171 million), or $CA1.23 per share — compared with the prior year period’s $CA161 million ($122 million) loss or $CA0.88 per share loss. Third-quarter revenues were roughly flat at $CA1.84 billion ($1.39 billion), with comps down 1.7% despite a 15% year-over-year increase in digital sales.

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