Shareholders need to know more about HBC bids: regulator
TORONTO The Ontario Securities Commission released a series of details on Thursday about a bid to take over Hudson’s Bay Co. that it believes shareholders need to know before voting on the deal.
The ruling, which expands upon a brief oral decision given at the close of the OSC’S hearing last week, orders that if HBC chairman Richard Baker’s group of majority shareholders wants to proceed with the takeover, the company needs to correct its circular on the deal sent to shareholders last month. That process will take at least 19 days, pushing any potential vote on the deal into 2020.
The updated circular must address new information that has come to light this month, as well as concerns raised during the last week’s three-day OSC hearing about whether a special committee of the board of directors adequately supervised the privatization bid.
The OSC asked the company to provide shareholders with an analysis around competing bids. The special committee has maintained it did not receive any superior proposals during its months-long deliberation process. But it has also said that because Baker’s group refuses to sell its 57-per-cent stake, other bids aren’t feasible. The OSC order asks HBC to be clear about any provisions in the arrangement agreement with Baker’s group and “the effect of such provisions on the practicality of alternative transactions emerging.”
The circular also needs to tell shareholders about any limitations the special committee put on appraisers of HBC’S biggest asset, the Saks Fifth Avenue flagship in Manhattan. CBRE’S appraisal put the value at $2.1 billion for the property — a $2.7-billion drop from an independent appraisal in 2014. But the OSC wants HBC to say whether CBRE “in its professional judgment, considered such appraisal to be based on scenarios constituting the highest and best use.”
Once shareholders receive the circular, HBC will have to wait 14 days before conducting a shareholder vote.