HBC soars after Catalyst buys stake to block takeover

NEW YORK Canadian private equity firm Catalyst Capital Group Inc. bought a 10-per-cent stake in Hudson’s Bay Co. through a previously announced tender offer as part of its efforts to block a proposed takeover by the retailer’s chairman.

The Toronto-based firm said in a statement it had received and accepted about 18.5 million shares in Hudson’s Bay for roughly $187 million in cash at $10.11 per share. That’s a premium to a $9.45-a-share offer from chairman Richard Baker and his partners. The stock jumped nine per cent in Toronto, the biggest gain in more than two months. It ended that day up 7.6 per cent at $10.09.

Catalyst’s purchase of the minority stake adds to pressure on Baker to boost his bid, which also faces opposition from activist investor Jonathan Litt. Catalyst and Litt are pushing for a higher offer, arguing the owner of Saks Fifth Avenue has valuable real estate that could be unlocked.

“We look forward to working with HBC, the special committee of the board and the company’s stakeholders to ensure that this iconic company and its substantial assets are positioned to unlock value and that any transaction or strategic alternative maximizes value for the benefit of all shareholders,” Gabriel de Alba, Catalyst managing director and partner, said in the statement.

Baker and his partners, which collectively own about 58 per cent of Hudson’s Bay, had proposed taking the Toronto company private in June by buying the remaining shares they didn’t already own.