Hudson’s Bay Co.’s plan to go private just hit a road block.

Minority shareholders who say they hold a combined 28.2 per cent of the retailer plan to vote against the proposal led by Chairman Richard Baker, which was approved by the board last week. That’s enough to derail the plan, which needs the backing of a majority of the minority shareholders.

“The agreement that the company entered into is so fundamentally conflicted, that it shows the amount of leverage Richard Baker has over the board and management,” Gabriel de Alba, managing director of Catalyst Capital Group Inc., a private equity firm, said in a statement Thursday. “It is unconscionable that the board would use shareholders’ funds in a severely undervalued share buyback with massive tax leakage and dress it up as a premium transaction.”

Hudson’s Bay, which also owns Saks Fifth Avenue, didn’t immediately return an email seeking comment, nor did the Baker group.

Baker and his group of investors want full control of the Toronto-based retailer to turn the business around outside the glare of public markets. Together they hold about 57 per cent of HBC. Catalyst had been critical of the original Baker offer, which was raised to $1.9 billion (US$1.45 billion) or $10.30 a share before the board approved it.

De Alba, who said Catalyst is speaking on behalf of other shareholders, called on HBC’s board to have Baker release partners in his coalition so that they can consider other options, or to let the agreement expire and “run a true sale process.”

Catalyst, run by distressed debt lender Newton Glassman, says it controls 32.3 million shares, or 17.5 per cent of the outstanding common stock. It didn’t say which other shareholders oppose the plan. Land & Buildings Investment Management was said last week to signal that the offer undervalues the company, though it was still studying it.

HBC closed at $9.98 in Toronto, below Baker’s sweetened offer.