Saks to settle with shareholders who opposed HBC takeover
Saks Inc. has agreed to settlement terms in lawsuits filed by some of its shareholders over the $2.9-billion US takeover of the U.S. luxury retailer by Hudson's Bay Co.
A U.S. filing says Saks has agreed to make additional disclosures before shareholders vote on the deal, though the amount HBC agreed to in the deal won’t change.
The lawsuits alleged that Saks had reached an agreement that made it too difficult for rivals to mount a counter-offer against HBC.
The settlement proposed by Saks gives HBC a smaller termination fee if Saks doesn’t close the deal as agreed by the end of the year. The termination fee was originally $73.5 million and will be reduced to $68.5 million.
HBC will also get less time — three business days instead of four — to match any rival offer.
Saks will also be allowed to wait up to 72 hours – 24 hours more than originally agreed -- before it must alert HBC that it has received a confidential rival offer.
HBC announced the friendly takeover in July, saying it planned to open up to seven full-line Saks stores across Canada Vice-chairwoman Bonnie Brooks also announced plans to bring the iconic brand to Europe and Asia.
The U.S. filing says a memorandum of understanding signed by the parties will seek to withdraw the litigation, subject to court approval.
The U.S. retailer operates 42 stores, including its flagship Saks Fifth Avenue in New York. HBC has 48 Lord & Taylor department stores in the U.S. northeast. In Canada, it has 90 Bay department stores and 69 Home Outfitters housewares stores.
In addition to the Saks stores, the company hopes to open as many as 25 Saks Off Fifth discount locations in Canada.
Some of those new stores could come in the form of rebranding and relaunching existing Bay stores, the company said.
with files from CBC News