HBC group may abandon take-private bid: memo

NEW YORK/MONTREAL Hudson’s Bay Co. chairman Richard Baker may scrap an offer to take the struggling retailer private after regulators delayed a vote on the deal following complaints from a minority shareholder.

The investor group that controls the owner of Saks Fifth Avenue is “evaluating next steps, including terminating the transaction,” according to a memo sent to advisers. The group plans to make a final decision in a week or so, according to the note.

Until then, it’s “pens down” until further notice, meaning no work is to be done on the deal. The Baker group cited third-quarter results and a delay in the shareholder vote ordered by the Ontario Securities Commission late Friday.

The Canadian regulator endorsed a complaint by Toronto-based minority shareholder Catalyst Capital Group Inc., which had sought a delay and increased disclosure on the Baker bid.

The vote had been scheduled for Tuesday on the $10.30-a-share offer that valued the Toronto-based company at $1.9 billion. Hudson’s Bay said Monday it will schedule a new date “as soon as practicable.”

The decision to consider scrapping the offer comes after preliminary tallies showed the Baker

group had fallen short of the necessary support from investors to proceed with the transaction, according to people familiar with the matter. The bid required the backing of a majority of the minority shareholders. The Baker group declined to comment.

The pulled deal would return the focus back on the retailer’s attempts to turn its business around and find a profitable mix between online and brick-and-mortar shopping. While it has reduced debt after selling assets in Europe, Hudson’s Bay is still struggling to boost sales at its eponymous chain in Canada, the oldest company in North America.