- Agreement between Richard Baker Group and HBC amounts to
nothing more than a severely undervalued share buyback at the
expense of shareholders
- Catalyst and other shareholders representing approximately
28.24% of the common shares of HBC intend to vote against the
agreement, representing a majority of the minority
shareholders
- HBC Board and Management have shown that they are
hopelessly conflicted
- Catalyst believes that a superior transaction is possible
and calls on the Board to explore alternatives that would maximize
value
TORONTO, Oct. 31, 2019 /CNW/ - The Catalyst Capital Group
Inc., on behalf of investment funds managed by it,
("Catalyst") today announced that it and other shareholders
of Hudson's Bay Company (TSX: HBC)
("HBC" or the "Company") representing approximately
28.24% of HBC's total common shares outstanding intend to vote
against the recently agreed transaction (the "Insider Issuer
Bid") between HBC and Richard A.
Baker, Governor and Executive Chairman of HBC, and certain
other insiders of the Company (collectively, the "Baker
Group").
Gabriel de Alba, Managing
Director and Partner of Catalyst, said, "Since the announcement of
the Baker Group proposal, we have held a belief that the HBC Board
and its Special Committee would ensure that the interests of all
shareholders would be the foundation of the process and negotiation
with Richard Baker. The
agreement that the Company entered into is so fundamentally
conflicted, that it shows the amount of leverage Richard Baker has over the Board and
Management. It is unconscionable that the Board would
use shareholders' funds in a severely undervalued share buyback
with massive tax leakage and dress it up as a premium
transaction."
Added de Alba, "With shareholders holding approximately 28.24%
of the HBC common shares now opposing the Insider Issuer Bid, we
call on the Board to either demand that Richard Baker release other members of the Baker
Group to consider other options or allow the Baker agreement to
expire and run a true sale process. Catalyst is aware of a
number of strategic investors that are interested in participating
in a process that is open and not constructed to benefit an
insider, and we have no doubt that the HBC Board is also aware of
these interested parties. Catalyst itself is also prepared to
be a participant in the process and work towards an offer to
acquire the Company at terms financially superior to the Insider
Issuer Bid."
Catalyst exercises control or direction over 32,326,878 common
shares of HBC, representing approximately 17.49% of the 184,331,345
issued and outstanding common shares as reported by the Company in
its Management's Discussion and Analysis dated September 12, 2019. Catalyst has begun to
formally review steps that may be taken in opposition to the
Insider Issuer Bid. Such actions include speaking with certain
securityholders of the Company and other parties in order to assess
support for Catalyst's position and for other reasons, and may
include the solicitation of proxies from securityholders of the
Company in opposition to the Insider Issuer Bid and regarding
related matters and taking steps or pursuing a course of action to
maximize value for all shareholders of the Company, including
pursuing an alternative transaction to the Insider Issuer Bid.
Depending on market conditions and other factors, Catalyst may in
the future increase or decrease its control or direction over
securities of the Company through open market transactions, private
agreements or otherwise.
This press release is also issued pursuant to National
Instrument 62-103 - The Early Warning System and Related
Take-Over Bid and Insider Reporting Issues, which requires a
report to be filed on SEDAR (www.sedar.com) containing additional
information with respect to the foregoing matters. To receive a
copy of the early warning report filed in respect of the above
matters, please contact Dan Gagnier
as outlined below.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this press release, including
statements regarding Catalyst and other shareholders' intention to
vote against the Insider Issuer Bid and Catalyst being prepared to
be a participant in the process, contain "forward-looking
statements" and are prospective in nature. Forward-looking
statements are not based on historical facts, but rather on current
expectations and projections about future events, and are therefore
subject to risks and uncertainties that could cause actual results
to differ materially from the future results expressed or implied
by the forward-looking statements. Often, but not always,
forward-looking statements can be identified by the use of
forward-looking words such as "plans", "expects", "intends",
"anticipates", or variations of such words and phrases or
statements that certain actions, events or results "may", "could",
"should", "would", "might" or "will" be taken, occur or be
achieved. Although Catalyst believes that the expectations
reflected in such forward-looking statements are reasonable, such
statements involve risks and uncertainties, and undue reliance
should not be placed on such statements. Material factors or
assumptions that were applied in formulating the forward-looking
information contained herein include the assumption that
shareholders who currently oppose the Insider Issuer Bid will
continue to do so, the business and economic conditions affecting
HBC's operations will continue substantially in the current state,
including, without limitation, with respect to industry conditions,
general levels of economic activity, continuity and availability of
personnel and third party service providers, local and
international laws and regulations, foreign currency exchange rates
and interest rates, inflation, and taxes, and that there will be no
unplanned material changes to HBC's facilities, operations and
customer and employee relations. Catalyst cautions that the
foregoing list of material factors and assumptions is not
exhaustive. Many of these assumptions are based on factors and
events that are not within the control of Catalyst and there is no
assurance that they will prove correct. Important factors that
could cause actual results, performance or achievements to differ
materially from those expressed or implied by such forward-looking
statements include, among other things, actions taken by HBC or the
Baker Group with respect to the Insider Issuer Bid and agreements
entered into among them, industry risk and other risks inherent in
the running of the business of HBC, foreign currency exchange rates
and interest rates, general economic conditions, legislative or
regulatory changes, changes in income tax laws, and changes in
capital or securities markets. These are not necessarily all of the
important factors that could cause actual results to differ
materially from those expressed in any of Catalyst's
forward-looking statements. Other unknown and unpredictable factors
could also impact its results. Many of these risks and
uncertainties relate to factors beyond Catalyst's ability to
control or estimate precisely. Consequently, there can be no
assurance that the actual results or developments anticipated by
Catalyst will be realized or, even if substantially realized, that
they will have the expected consequences for, or effects on,
Catalyst or HBC and their respective future results and
performance. Forward-looking statements in this press release are
based on Catalyst's beliefs and opinions at the time the statements
are made, and there should be no expectation that these
forward-looking statements will be updated or supplemented as a
result of new information, estimates or opinions, future events or
results or otherwise, and Catalyst disavows and disclaims any
obligation to do so, except as required by applicable law.
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SOURCE The Catalyst Capital Group Inc.