Hudson's Bay to review options, including privatization, after activist pressure: report
HBC's review includes options such as going private, potential sales of retail assets and real estate
Hudson's Bay Co, the owner of the Saks Fifth Avenue and Lord & Taylor retail chains, is seeking to carry out a review of its options, including going private, following pressure from an activist shareholder, people familiar with the matter said.
The Canadian retailer's largest shareholder and executive chairman Richard Baker is looking for a new strategy after unsuccessful attempts this year to merge Hudson's Bay with U.S. department store operators Macy's Inc and Neiman Marcus.
Hudson's Bay, which is already working with an investment bank to defend itself against activist hedge fund Land and Buildings, has been seeking to hire another financial adviser to carry out the review, the people said this week.
The review will consider all available options, from the possibility of the company going private to potential sales of retail assets and real estate, the sources said, cautioning that no transaction is certain.
The sources asked not to be identified because the deliberations are confidential. Hudson's Bay declined to comment.
Hudson's Bay shares rose 14 per cent to close at $11.45 on the news, giving the company a market capitalization of around $2.03 billion.
The shares have lost close to 40 per cent of their value in the last 12 months as the company struggles with a decline in sales with consumers continuing their shift away from malls to online retailers.
Land and Buildings urged the company in June to consider going private and to monetize its real estate holdings. The hedge fund's founder Jonathan Litt has called Hudson's Bay "a real estate company, full stop."
Hudson's Bay has more than $10 billion in real estate assets, with the flagship Saks store on Fifth Avenue in New York alone valued at $3.7 billion.
Land and Buildings escalated the pressure last month, saying it would seek to nominate directors to serve on the company's board unless the company took major steps to increase its stock price, including potentially selling Saks Fifth Avenue.