Shareholders of Hudson’s Bay Co. have given the company the green light to go private.
The Toronto-based firm — parent to flagship brand Hudson’s Bay Company as well as Saks Fifth Avenue and Saks Off 5th — announced that the deal, proposed by executive chairman Richard Baker, was approved by an overwhelming majority of shareholders, or more than 98% of votes cast. The resolution, which required approval by a “majority of the minority” shareholders, also received support from more than 94% of minority shareholders.
As part of the plan, HBC will become a private company owned by a group of continuing shareholders led by Baker, and its other shareholders will receive CA$11 ($8.46) per share in cash. The deal, which is subject to approval on Friday in the Ontario Superior Court of Justice, is expected to be completed on March 3.
The announcement comes after months of back-and-forth buyout proposals between Baker and a coalition of investors, including Rhône Capital LLC and WeWork Property Advisors, and private equity firm Catalyst Capital Group Inc.
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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.
However, 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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