HBC shareholders vote to take company private

By

Robin Driver

Published
Feb 27, 2020

Following months of negotiations, Hudson’s Bay Company (HBC) shareholders voted overwhelmingly in favor of a deal to take the Canadian company private at a special meeting held on Thursday.

 
The plan, which will see HBC become a private company owned by a group of shareholders led by HBC governor and executive chairman Richard Baker, was approved by 98.28% of votes, far surpassing the 75% requirement.
 
In order to pass, the deal also had to be approved by a majority of HBC’s minority shareholders. The proposal received approval from 94.46% of their votes.

Through the deal, minority shareholders will receive C$11.00 per share for their stakes in HBC, which owns the Saks Fifth Avenue, Saks Off 5th and Hudson’s Bay brands.

The Baker-led group first offered C$9.45 per share in June of last year, before raising this figure to C$10.30 in October, and finally to C$11.00 in order to match a counteroffer from Catalyst Capital, one of HBC’s minority shareholders.

The subsequent signing of a voting support agreement with Catalyst, who along with Paradise Developments, had been one of the most vocal opponents to the transaction, meant that obtaining approval for the transaction has seemed increasingly likely.

Earlier this month proxy advisory firms Institutional Shareholder Services (ISS), Glass Lewis and Egan-Jones also weighed in on the proposed deal, unanimously recommending that minority shareholders vote in its favor.
 
By taking HBC private, the company’s new owners hope to have more freedom to implement the turnaround strategies that the retailer so desperately needs without being constantly beholden to shareholder demands concerning the company’s growth and dividends.
 
As it looks forward to a new phase in its development, HBC will also be able to count on the retail experience of Iain Nairn and Paige Thomas, recently appointed as presidents of the Hudson’s Bay and Saks Off 5th brands, respectively.
 
HBC has been struggling to adapt to a rapidly evolving retail landscape over the past few years, reporting a third-quarter net loss of C$175 million on revenues of C$1.8 billion in December of last year.

Thus far, efforts to get the company back on its feet have included the sale of its Lord & Taylor banner to Le Tote in August 2019, as well as the shuttering of its operations in Europe.
 
The take-private deal is still subject to customary closing conditions, including approval from the Ontario Superior Court of Justice. HBC will seek a final order from the court on February 28 and expects to complete the deal around March 3.