HBC Is Set to Become a Private Company

Hudson’s Bay Co. is one step closer to becoming a private company.

The Canada-based firm today received approval from the Ontario Superior Court of Justice to go private. As part of the plan, HBC will be owned by a group of continuing shareholders led by executive chairman Richard Baker, who steered the proposal along with a coalition of investors including Rhône Capital LLC and WeWork Property Advisors. The company’s other shareholders will receive CA$11 ($8.46) per share in cash.

The arrangement, which was overwhelmingly approved at a special meeting yesterday by HBC’s shareholders, is expected to be effective on or around March 3. Following completion, the company’s common shares will be delisted from the Toronto Stock Exchange.

Today’s court approval comes after months of back-and-forth buyout proposals between Baker’s group and private equity firm Catalyst Capital Group Inc.

As it heads toward privatization, HBC continues to face challenges. Since Helena Foulkes took the helm as CEO in February 2018, the retail group has shed many of its less profitable businesses to focus on top performer Saks Fifth Avenue and the namesake Hudson’s Bay. It sold flash sale site Gilt to Rue La La in June 2018, and it let go of its Lord & Taylor business before the start of the 2019 holiday season.

HBC’s financial results for the three months ended Nov. 2 showed widening net losses to $CA226 million ($171 million), or $CA1.23 per share — compared to the prior year period’s $CA161 million ($122 million) loss or $CA0.88 per share loss. Losses from continuing operations were $CA175 million. Third-quarter revenues were roughly flat at $CA1.84 billion ($1.39 billion), with comps down 1.7% and a 15% year over year increase in digital sales.

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