Board Unanimously Recommends Shareholders Vote
in Favor of the Arrangement Resolution
Hudson’s Bay Company (TSX: HBC) (“HBC” or the “Company”) today
announced it has filed the Management Information Circular (the
“Circular”) and related proxy materials with Canadian securities
regulatory authorities in connection with the special meeting of
shareholders (the “Special Meeting”) to be held at The Arcadian
Loft, 8th Floor, 401 Bay Street, Toronto, Ontario, on December 17,
2019 at 10:00 a.m.
The purpose of the Special Meeting is to obtain shareholder
approval of a transaction in which Hudson’s Bay Company will become
a private company, owned by certain continuing shareholders (the
“Continuing Shareholders”), and the Company’s other shareholders
(the “Minority Shareholders”) will receive $10.30 in cash per
share.
This transaction is being recommended by a Special Committee of
independent directors (the “Special Committee”). The Special
Committee conducted, with the assistance of its financial and legal
advisors, an extensive review of the Company’s operations and real
estate assets, and of alternatives available to the Company, and
obtained an independent valuation of the Company’s common shares.
The Special Committee also had extensive negotiations with the
Continuing Shareholders regarding the purchase price of the common
shares and other terms of the transaction. Following this
comprehensive process, and after careful deliberation, the Special
Committee unanimously determined that the transaction is in the
best interests of HBC and is fair to the Minority Shareholders.
The Board, excluding conflicted directors (who did not
participate in deliberations), acting on the unanimous
recommendation of the Special Committee, unanimously determined
that the transaction is in the best interests of HBC and is fair to
Minority Shareholders and recommends that Minority Shareholders
vote FOR the transaction for
the following reasons, among others:
- The Consideration provides a compelling value proposition for
Minority Shareholders and is within the fair value range determined
by TD Securities Inc.
- The retail environment is deteriorating
- The value of HBC’s real estate portfolio has declined
- There are challenges in realizing the Company’s real estate
value
- Any potential redevelopment of HBC’s real estate portfolio will
require significant capital, as well as an extended multi-year time
horizon
- The Company has significant obligations that constrain its
ability to return capital to shareholders
- There are limited alternatives for a sale to third parties
- The transaction is the result of a process that included robust
negotiations and procedural safeguards
- There are a limited number of closing conditions related to the
completion of the transaction
A copy of the Circular and related proxy materials may be found
under the Company’s profile on SEDAR at www.sedar.com and on HBC’s
website at http://investor.hbc.com/investor-relations. The Company
intends to mail the Circular to its shareholders in the upcoming
days.
About HBC
HBC is a diversified retailer focused on driving the performance
of high-quality stores and their omni-channel platforms and
unlocking the value of real estate holdings. Founded in 1670, HBC
is the oldest company in North America. HBC’s portfolio today
includes formats ranging from luxury to premium department stores
to off price fashion shopping destinations, with nearly 250 stores
and approximately 30,000 employees around the world. HBC’s leading
businesses across North America include Saks Fifth Avenue, Hudson’s
Bay, and Saks OFF 5TH. HBC also has significant investments in real
estate joint ventures. It has partnered with Simon Property Group
Inc. in the HBS Joint Venture, which owns properties in the United
States. In Canada, it has partnered with RioCan Real Estate
Investment Trust in the RioCan-HBC Joint Venture.
Forward-Looking Statements
Certain statements made in this news release are forward-looking
statements within the meaning of applicable securities laws,
including, but not limited to, statements with respect to the
rationale of the Special Committee and the Board of Directors for
entering into the Arrangement Agreement, the terms and conditions
of the Arrangement Agreement, the timing of various steps to be
completed in connection with the transaction, and other statements
that are not material facts. Often but not always, forward-looking
statements can be identified by the use of forward-looking
terminology such as “may”, “will”, “expect”, “believe”, “estimate”,
“plan”, “could”, “should”, “would”, “outlook”, “forecast”,
“anticipate”, “foresee”, “continue” or the negative of these terms
or variations of them or similar terminology.
Although HBC believes that the forward-looking statements in
this news release are based on information and assumptions that are
current, reasonable and complete, these statements are by their
nature subject to a number of factors that could cause actual
results to differ materially from management’s expectations and
plans as set forth in such forward-looking statements, including,
without limitation, the following factors, many of which are beyond
HBC’s control and the effects of which can be difficult to predict:
(a) the possibility that the transaction will not be completed on
the terms and conditions, or on the timing, currently contemplated,
and that it may not be completed at all, due to a failure to obtain
or satisfy, in a timely manner or otherwise, required shareholder
and regulatory approvals and other conditions of closing necessary
to complete the transaction or for other reasons; (b) risks related
to tax matters; (c) the possibility of adverse reactions or changes
in business relationships resulting from the announcement or
completion of the transaction; (d) risks relating to HBC’s ability
to retain and attract key personnel during the interim period; (e)
the possibility of litigation relating to the transaction; (g)
credit, market, currency, operational, real estate, liquidity and
funding risks generally and relating specifically to the
transaction, including changes in economic conditions, interest
rates or tax rates; (h) risks and uncertainties relating to
information management, technology, supply chain, product safety,
changes in law, competition, seasonality, commodity price and
business; and (i) other risks inherent to the Company’s business
and/or factors beyond its control which could have a material
adverse effect on the Company or the ability to consummate the
transaction.
HBC cautions that the foregoing list of important factors and
assumptions is not exhaustive and other factors could also
adversely affect its results. For more information on the risks,
uncertainties and assumptions that could cause HBC’s actual results
to differ from current expectations, please refer to the “Risk
Factors” section of HBC’s Annual Information Form dated May 3, 2019
as well as HBC’s other public filings, available at www.sedar.com
and at www.hbc.com.
The forward-looking statements contained in this news release
describe HBC’s expectations at the date of this news release and,
accordingly, are subject to change after such date. Except as may
be required by applicable Canadian securities laws, HBC does not
undertake any obligation to update or revise any forward-looking
statements contained in this news release, whether as a result of
new information, future events or otherwise. Readers are cautioned
not to place undue reliance on these forward-looking
statements.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191115005222/en/
Investor Relations: Jennifer Bewley, 646-802-4631
jennifer.bewley@hbc.com
Media:
Special Committee Sard Verbinnen & Co Liz Zale/Paul
Scarpetta, 212-687-8080 Meghan Gavigan, 415-618-8750
Company Andrew Blecher, 646-802-4030 press@hbc.com