HBC Board Mulls Shareholders' Take-Private Bid

Hudson's Bay Company (HBC) announced today that its board of directors has formed a committee of independent directors to review a proposal from a group of HBC shareholders who would like to take the company private at $9.45 per share. The shareholders, who collectively own 57 percent of the company, include HBC Governor and Executive Chairman Richard Baker, Rhone Capital, WeWork Property Advisors, Hanover Investments (Luxembourg), and Abrams Capital Management.

“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,” said Baker. The Special Committee noted that no decision has been made and it intends to carefully and thoroughly review the proposal with the assistance of its outside financial and legal advisors.

In a separate announcement released today, HBC said that it sold the remaining half of its interest in its European businesses for $1.5 billion. Helena Foulkes, CEO of HBC said that the sale will provide HBC with an opportunity to capitalize on its German real estate and further strengthen its balance sheet. "Strategically, we will be able to fully focus our resources on HBC’s North American operations, including our best growth opportunities — Saks Fifth Avenue and Hudson’s Bay," Foulkes said. "This transaction is another bold action that unlocks the value of our real estate and demonstrates our resolve to creating a stronger, more capable HBC.”

Total Retail's Take: HBC isn’t the only retailer to pursue a going-private strategy. The Nordstrom family offered to take the Seattle-based company private for approximately $8.4 billion in March 2018, but the bid was rejected by special committee of the retailer’s board, which said the offer was too low. Of course, going private could have many benefits for HBC. For example, HBC wouldn't be beholden to public shareholders who demand short-term profits, an increasingly challenging task for brick-and-mortar retailers, particularly department stores.