Hudson’s Bay eyeing bid to take over Macy’s

TORONTO (CP) — Hudson’s Bay. Co. appears to be continuing its aggressive international growth with reports it’s eyeing another American retailer, Macy’s.

HBC declined to comment after a report by the Wall Street Journal, citing unnamed sources, said the two retail giants were in preliminary talks for a takeover.

“We do not comment on rumour or speculation,” HBC spokeswoman Tiffany Bourre wrote in an email. A Macy’s spokesperson echoed the response.

But it’s likely where there’s smoke, there’s fire, said retail analyst Bruce Winder, co-founder and partner of Retail Advisors Network.

“There’s probably something here going on behind the scenes.”

It’s likely HBC is after Macy’s extensive real estate, Winder said.

As of April 2, 2016, the company operates about 870 stores across the U.S., as well as Guam and Puerto Rico, according to Macy’s website. In August, the company announced that it would close about 100 locations.

Starboard Value LP., a New York-based investment adviser and significant shareholder in Macy’s, has been pressuring the retail chain to spin off its real estate holdings.

Starboard estimates the assets are worth US$21 billion and could be turned into joint-venture real estate income trusts that would create $10 billion in shareholder value.

Macy’s hired an executive vice-president for real estate last year with the task of creating and structuring real estate opportunities. In November, the company announced a strategic alliance with Brookfield Asset Management, giving the asset manager two years to create more value from some of its real estate.

HBC, founded in 1670, has made a number of acquisitions in recent years.

In 2013, HBC announced it struck a deal to acquire Saks Inc. for US$2.9 billion, including debt. The acquisition allowed it to bring the luxury retailer Saks and its discount brand Saks Off 5th to Canada. Since then, HBC has opened two Saks locations and nine Saks Off 5th stores in the country, with many more planned.