The battle for Hudson’s Bay Co. continues to intensify.
In a letter to the company’s special committee, the group of shareholders led by chairman Richard Baker has addressed Catalyst Capital Group Inc.’s proposal to acquire HBC, urging it to take one of two avenues: Either the committee accepts the Baker group’s all-cash offer of CA$10.30 ($7.86) per share or it remains investors in HBC as a public company.
The Baker group, which collectively owns 57% of HBC, wrote that it had “serious concerns” following a review of Catalyst’s competing Nov. 27 offer of CA$11.00 ($8.29) per share in cash for all common shares of the Canadian retailer.
Baker’s consortium of investors, which includes Rhône Capital LLC and WeWork Property Advisors, accused the Catalyst announcement of intending “to mislead minority shareholders” and “manipulate the market.” It added that the proposal was “not capable of being financed” and could ultimately lead to HBC’s addition “to the long list of retailers that have been forced to close their doors.”
Last week, Catalyst, which holds about 17.5% of HBC’s common shares, topped what Baker’s group said was its “best and final offer,” already 9% higher than Baker’s initial bid of CA$9.45 ($7.22) per share made on June 10, when HBC formed a special committee to review its take-private bid. In its latest proposal, the private equity firm valued the company at CA$2.03 billion ($1.53 billion).
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HBC’s bid to go private was first met with opposition from Catalyst early this month, when the firm, along with other minority shareholders, issued a statement indicating its intention to vote against Baker’s proposal. This group altogether represented roughly 28.24% of the company’s total common shares.
FN has reached out to HBC and Catalyst for comment.
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