Business

Catalyst Capital Group makes rival takeover offer for Hudson's Bay Co

Catalyst Capital Group is offering $11 per share in cash to acquire Hudson's Bay, topping an offer of $10.30 made by a group of investors led by HBC executive chairman Richard Baker.

Catalyst already holds a roughly 17.5 per cent stake in HBC

A woman leaves the Hudson Bay Company store in Toronto in this November 2017 photo. Catalyst Capital, a minority shareholder in HBC, is launching an $11-per-share takeover bid for the retailer. (Nathan Denette/Canadian Press)

Catalyst Capital Group Inc. is making a rival takeover offer for Hudson's Bay Co.

The investment firm is offering $11 per share in cash, topping an offer of $10.30 made by a group of investors led by HBC executive chairman Richard Baker.

HBC shares were up $1.04, or 11.78 per cent, at $10.03 in early trading on the Toronto Stock Exchange on Wednesday.

Catalyst already holds a roughly 17.5 per cent stake in HBC and has said it plans to vote against the offer by the group led by Baker.

Gabriel de Alba, managing director and partner of Catalyst, says the firm's offer is independently financed, superior in both value and treatment of shareholders and can be completed in a timely manner.

"Catalyst is committed to taking the necessary steps to ensure that its superior offer is evaluated on its merits and that the board is able to liberate itself from the coercive influence of Richard Baker and act for us all," de Alba said in a statement.

"We are prepared to participate in an open, fair and competitive auction process."

In making its proposal, Catalyst also filed a complaint with the Ontario Securities Commission regarding the Baker group bid.

It alleges the insider issuer offer is the result of a flawed process and asked the regulator to examine the proposal and take appropriate action.

The shareholder group led by Baker reached its friendly deal with the HBC board last month after it raised its offer to $10.30 from its initial proposal of $9.45 per share.

The deal, which is subject to court and regulatory approvals, requires approval from a majority of the HBC shareholders, excluding the shareholders behind the bid and their affiliates, as well as approval by a 75 per cent majority vote at a special meeting of shareholders that HBC expects to hold in December.

Catalyst has said that along with other HBC shareholders that together control a 28.24 per cent stake of the company's common shares, it plans to vote against the Baker-led bid.

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