Proxy adviser ISS opposes plan by Hudson's Bay chairman
to take firm private
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[December 07, 2019] (Reuters)
- Institutional Shareholder Services said
on Friday it recommends shareholders vote against a plan by the chairman
of Hudson's Bay Co <HBC.TO> to take the Saks Fifth Avenue owner private
after the bid was topped by an offer from Catalyst Capital Group Inc.
In October, Hudson's Bay agreed to a C$1.9 billion ($1.4 billion) offer
worth C$10.30 per share from shareholders led by Chairman Richard Baker.
The group, which collectively owns 57% of Hudson's Bay, includes private
equity firm Rhone Capital LLC and office-space sharing start-up WeWork's
But private equity firm Catalyst Capital Group Inc, which owns 17.5% of
Hudson's Bay and was unhappy with the bid by the Baker-led consortium,
offered C$11 per share in November.
ISS said in a note there was "no legitimate rationale from a governance
perspective for recommending shareholders accept a lower offer."
David Leith, chairman of Hudson's Bay's special board committee that
negotiated the sale to Baker's group, said this week that the Catalyst
offer was not an option available to Hudson's Bay shareholders.
They could either accept the Baker-led offer or Hudson's Bay would
continue as a public company, he said.
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U.S. flags fly outside of Saks Fifth Avenue in New York, U.S., June
19, 2017. REUTERS/Lucas Jackson/File Photo
Hudson's Bay shares closed at C$9.13 on Friday, in a sign that investors do not
expect either bid to succeed.
Catalyst has urged Hudson's Bay shareholders to shoot down the deal with Baker
in a vote scheduled for Dec. 17. Baker's consortium will be excluded from the
vote on the deal.
Representatives for Hudson's Bay and Catalyst did not respond to Reuters'
requests for comment late on Friday.
Baker's take-private offer comes seven years after he took Hudson's Bay public,
and values the company at just a third of its 2015 worth, reflecting the
challenges brick-and-mortar retailers face as they compete with online shopping.
(Reporting by Bhargav Acharya in Bengaluru and Greg Roumeliotis in New York;
Editing by Edwina Gibbs)
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