Just hold tight with your stock in the Bay
HBC shares have plummeted, but are worth more than $9.45
Now, why would you tender your Hudson’s Bay Co. shares to the takeover offer, unveiled last week, of just $9.45 when the firm’s CEO bragged to investors in September that HBC’s real estate alone is worth $28 per share?
Of course you’re disappointed with your HBC investment, and you welcome the chance to exit from it at a 48 per cent premium to the firm’s latest closing price before the offer was made.
HBC stock has lost a stunning 68 per cent of its value since its 2015 peak. The firm has accumulated consecutive losses over the past three years of $1.6 billion, including last year’s $631 million.
The folly-prone U.S. ownership group that controls 47 per cent of HBC stock has failed with European acquisitions; with a relic of the golden era of department-store retailing (Lord & Taylor); and a botched foray into off-price retailing, Saks Off 5th, that will be remembered for its unreasonably high prices, unfashionable goods, and crumpled merchandise littering the floor.
So, here’s what you do: Hold out for 15 bucks.
That still leaves chair Richard Baker with a fat profit on real estate, which was this faux retailer’s aim all along. And a tip to Baker: You’re missing a
lucrative opportunity if you don’t spin off HBC-branded merchandise and deal it to, say, a Weston family (Holt Renfrew, Selfridges, Brown Thomas) that knows how to nurture heritage brands.
The only thing holding back ubiquity for increasingly popular HBC scarves, mittens, baby blankets and the like is their continued entombment inside a chronically failed retail conglomerate.
If Weston doesn’t bite, try Roots Ltd. or Lululemon Athletica Inc. The insurance lobby versus pharmacare Expect private-sector insurers to mount a public-relations campaign against the universal pharmacare that the Trudeau government last week vowed to introduce, now expected to be the centrepiece of the Liberals’ bid for re-election in October. That’s quite a turnaround. As recently as the latest federal budget in March, Ottawa clung to a patchwork system of targeted assistance only to those without access to provincial or employer drug plans.
That piecemeal approach has now become the federal Tory policy, as Andrew Scheer, leader of the Conservative Party of Canada, indicated last week in condemning genuine universal pharmacare as too ambitious for the Liberals to handle in a fiscally responsible way.
The insurance lobby, pleased with the patchwork approach advocated by Scheer and recently abandoned by the Liberals, now has reason to fear having to compete against universal pharmacare.
In pushing back against it, the odds don’t favour the insurance industry, and neither does the math.
The Liberals and NDP will try to outbid each other in the election campaign, asking voters to choose between a gradual rollout of pharmacare between 2022 and 2027 (the Liberals) and full pharmacare now (the NDP). That debate could sideline Scheer and the insurers from the biggest issue in the campaign.
As to the math, by 2027, universal pharmacare would be an estimated $15.3-billion budget item per year. But the country’s total drug bill would fall by $4.2 billion, according to the federal budget watchdog, due to volume buying by a single payer, as Medicare has long worked. And the average Canadian would reap an estimated $350 a year in savings.
Insurers will come out swinging, but they’re unlikely to score many runs. Agood man in a bad job When he signed on as CEO of SNC-Lavalin Group Inc., the Montreal-based engineering and construction giant, Neil Bruce didn’t know he was taking on an intensely political job.
That’s politics with a capital “P,” not the kind that animate every workplace.
Bruce, 58, who abruptly stepped down as CEO last week after a four-year run, had more political masters than any private-sector CEO can be expected to understand, much less consistently satisfy. Among his bosses was the mayor of Montreal, the premier of Quebec, and the Canadian prime minister, all pressuring Bruce to rescue a crown jewel of Quebec Inc. from a legacy of corruption that predated the arrival of Bruce, a native Scot with one of the global industry’s most impressive track records.
It had to hurt Bruce that SNC shares jumped 7 per cent last week on news of his departure, since (a) the problems Bruce struggled with haven’t left with him, and (b) Bruce did SNC a lot of good.
With his 2017 purchase of the large U.K. consulting firm W.S. Atkins alone, Bruce diversified SNC into a less volatile realm than SNC’s core businesses. Some of those, including infrastructure and oil and gas projects, are headed for an auction block that Bruce himself prepared them for.
Watch for SNC stock to slump again after last week’s bounce, as reality sets in that SNC still faces a criminal trial on alleged long-ago misconduct in Libya, and that dynamic turnaround gambits including asset sales can be vetoed by Quebec.
Here’s hoping Bruce’s likely successor, interim CEO Ian Edwards, a fellow Brit, realizes he won’t be his own man at SNC, any more than Bruce was.