Hudson’s Bay Company Reviewing Proposal to Go Private, Announces Sale of German Operations for $1.5 Billion

Executive Summary

On June 10, 2019, Hudson’s Bay Company (HBC) announced that its board of directors had formed a special committee of independent directors to review a shareholder proposal to privatize the company. HBC also announced it had entered into an agreement to sell its real estate and retail operations in Germany for $1.5 billion (€1 billion).

• HBC formed a special committee of independent directors to review a proposal from HBC shareholders to privatize the company at a price of C$9.45 per share, or approximately $1.28 billion as of the company’s closing price on June 7, 2019, a 48% premium.
• HBC announced it entered into an agreement to sell its stake in its German real estate joint venture and retail joint venture for $1.5 billion. As part of the transaction, HBC will assume ownership of the Netherlands retail business. The proceeds will be used to strengthen HBC’s balance sheet and to fully repay the company’s term loan of $436 million.
• These two announcements come on the heels of the company’s recent press releases regarding Lord & Taylor: On May 6, 2019, HBC reported the company was reviewing strategic alternatives for department store Lord & Taylor, including a possible sale or merger. On February 11, 2019, Hudson’s Bay closed the sale of the building for its New York City Lord & Taylor flagship store on Fifth Avenue for a total transaction value of $850 million (C$1.1 billion).