Catalyst eyes bigger piece of HBC pie in order to block takeover bid
Private equity firm Catalyst Capital Group Inc. is offering to purchase up to $150 million worth of shares of Hudson’s Bay Co. (HBC.TO) as it builds a stake in the Canadian retailer in an effort to thwart a proposed takeover of the company.
The Toronto-based firm said in a statement Monday it was was prepared to pay $10.11 per share in cash for up to roughly 14.8 million common shares. That’s a seven per cent premium on the $9.45 a share the company’s chairman, Richard Baker, and his partners offered to take the company private last month.
Hudson’s Bay has yet to formally respond to the take-private offer. Representatives for Hudson’s Bay and Baker weren’t immediately available for comment.
Catalyst, founded by businessman Newton Glassman, said it planned to oppose the buyout and request that the company’s special committee explore all alternatives that will maximize value for shareholders. Catalyst also purchased a significant portion of a block of Hudson’s Bay shares that was sold by Ontario Teachers’ Pension Plan Board last month, according to people familiar with the matter. It’s unclear how big a stake Catalyst owns in the retailer.
“Catalyst believes that the insider buyout proposal greatly undervalues the company across each of its real estate, retail and iconic brand attributes,” the firm said in the statement. “The special committee has a duty to explore any and all transactions that have the potential to maximize value for all shareholders over the near or long-term.”
The private equity firm isn’t the only one opposing the take-private transaction. Activist investor Jonathan Litt has also called the offer “woefully inadequate” and says he opposes the plan.
Catalyst said its offer would remain in place until 5 p.m. on Aug. 16.