HBC Recommends Shareholders Vote “FOR” the
Transaction Agreement
Shareholders are encouraged to vote before the
proxy voting deadline of 10:00 am ET on December 13, 2019
Hudson's Bay Company (TSX: HBC) ("HBC" or the “Company”) today
announced that Glass Lewis and Egan-Jones have both recommended
that HBC shareholders vote “FOR” the transaction in which
HBC will become a private company. With this transaction, HBC will
be owned by certain continuing shareholders (the “Continuing
Shareholders”) and the Company’s other shareholders (the “Minority
Shareholders”) will receive $10.30 per share in cash.
David Leith, Chair of the Special Committee, said, “We are
pleased that Glass Lewis and Egan-Jones understand the Special
Committee’s process and recommendation and have both recommended
that shareholders vote for the proposed transaction. The support of
these independent proxy advisors further demonstrates that this
transaction represents the best path forward for HBC, is fair to
the Minority Shareholders, and provides certain and immediate value
at a significant market premium. Their recommendations also
reinforce the comprehensive nature of the Special Committee’s
evaluation, including consideration of the applicable risks,
opportunities and alternatives available, as well as an
acknowledgement of our efforts, including extensive negotiations to
maximize value for our shareholders.”
Proxy Advisory Firms Recommendations
In making its recommendation FOR, Glass Lewis concluded
that:
● “[T]he Arrangement Agreement would provide unaffiliated
shareholders with certainty of value for their HBC shares at a
sizable market premium and a relatively attractive valuation.”
● “[I]n the absence of the proposed transaction contemplated
under the Arrangement Agreement, we believe it is reasonable to
expect that the Company’s share price would experience a
substantial decline in value in the immediate term, with any future
price recovery subject to further material uncertainty.”
● “[W]e believe that the special committee has made a reasonable
determination and conclusion in rejecting the Catalyst Proposal.
Since the Continuing Shareholders, who collectively hold a majority
of the Company’s voting power, have clearly expressed that they
would oppose the Catalyst Proposal in their capacity as HBC
shareholders, we simply see no viable path for the Catalyst
Proposal to achieve any of the requisite shareholder vote hurdles
at this time. Therefore, we believe it would be nonsensical for the
board to terminate the Arrangement Agreement, and imprudent for HBC
shareholders to reject the Arrangement Agreement, simply for the
opportunity to consider an alternative proposal that would
ultimately stand no chance of being approved.”
● “In our view, rejecting the Arrangement Agreement would only
potentially make sense here for those shareholders who have an
aggressive risk tolerance and a particularly strong conviction
regarding the Company’s upside (and the Company’s ability to
achieve such upside).”
In recommending a vote FOR the transaction, Egan-Jones
noted that:
● The proxy advisory firm’s review “centered on the Proposals in
the context of maximizing shareholder value”
● “Based on the review of publicly available information on
strategic, corporate governance and financial aspects of the
proposed transaction, Egan-Jones views the proposed transaction to
be a desirable approach in maximizing shareholder value.”
● “After careful consideration, we believe that approval of the
plan of arrangement is in the best interests of the Company and its
shareholders and its advantages and opportunities outweigh the
risks associated to the transaction.”
● “The Company and the retail and department store real estate
industry as a whole face numerous risks and uncertainties which are
expected to negatively affect the trading price of the Common
Shares.”
Special Meeting of Shareholders on December 17, 2019
Each shareholder’s vote is important regardless of the number of
shares owned. The Special Committee and the Board (excluding
conflicted directors) recommend that Minority Shareholders vote in
favour of the transaction in advance of the proxy voting deadline
of 10:00 a.m. ET on Friday, December 13, 2019 or at the Special
Meeting of shareholders that will be held on Tuesday, December 17,
2019 at 10:00 a.m. ET for shareholders to approve the transaction.
Shareholders with questions about how to vote their shares may
contact the HBC’s proxy solicitation agent, Kingsdale Advisors, by
telephone at 1-866-581-0512 (toll-free) or 1-416-867-2272 (collect)
or by email at contactus@kingsdaleadvisors.com.
Materials related to the Special Meeting, will be available
under HBC’s profile on SEDAR at www.sedar.com and on HBC’s website
at www.investor.hbc.com. Shareholders can access voting
instructions and additional information about the transaction,
including the Management Information Circular, by visiting
www.HBCGoPrivate.com.
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
recommending the privatization transaction, the timing of 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; (f)
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; (g) risks and uncertainties relating to
information management, technology, supply chain, product safety,
changes in law, competition, seasonality, commodity price and
business; and (h) 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” sections of HBC’s Annual Information Form dated May 3,
2019 and Management Information Circular dated November 14, 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/20191211005526/en/
Investor Relations: Jennifer Bewley, 646-802-4631
jennifer.bewley@hbc.com
Media: Special Committee Sard Verbinnen & Co. Liz
Zale and Paul Scarpetta, 212-687-8080 Meghan Gavigan, 415-618-8750
HBC-SVC@sardverb.com
Company
Andrew Blecher, 646-802-4030 press@hbc.com