Saks Owner Hudson’s Bay Shareholders Make Bid To Take Firm Private

Amid brick-and-mortar retail struggles and stock price volatility, a go-private offer has emerged for Hudson’s Bay Co., which owns Saks Fifth Avenue and Lord & Taylor.

As reported by The Wall Street Journal on Monday (June 10), a group of Hudson’s Bay shareholders have come forth with the proposal — and the group includes Chairman Richard Baker and WeWork Property Advisors, among others, and collectively they own 57 percent of the firm’s shares outstanding.

The offer, at 9.45 Canadian dollars, roughly $7.12 USD equivalent, was a 48 percent premium to the closing price on Friday (June 8).  The news sent the stock up more than 40 percent in intraday trading, and recoups at least some of the roughly 50 percent loss that had been seen year to date through the time of the offer.

In terms of the deal’s mechanics, the report said the firm had agreed to sell its stake in a European joint venture for 1.5 billion Canadian dollars, exiting the German market while staying in the Netherlands (with an eye on revamping operations there).

“While we continue to believe in HBC’s long-term potential, it has become clear that the significant challenges, risks and uncertainties facing HBC in the rapidly evolving retail environment are best addressed in a private market setting,” Baker said in a Monday statement announcing the bid.

The sale comes as Saks faces the same pressures that have bedeviled peers like Macy’s, and where Hudson’s Bay has seen pressures as consumers have shifted their shopping from brick-and-mortar locations to online sites. The numbers show Hudson’s Bay sales were down more than 1 percent in the latest fiscal period to 9.3 billion Canadian dollars.

The chairman, Baker, had been building the company through a series of corporate maneuvers that saw a $1.2 billion buy of Lord & Taylor in 2006, the public debut of Hudson’s Bay as a public company in 2012, and the acquisition of Saks Fifth Avenue in 2013. The company had also struck deals with mall owners in a bid to maximize real estate value and holdings. In one such move, the company agreed to sell its Lord & Taylor building located in New York to WeWork Property Advisors and Rhone Capital in a $850 million deal that closed earlier this year.