TORONTO -- The Ontario Securities Commission held a hearing Wednesday at the request of a Hudson's Bay Co. (HBC.TO) activist investor to review a Toronto Stock Exchange decision concerning shares involved in the sale of a New York City property.

Land & Buildings Investment Management LLC applied on Monday for the regulator to review the TSX's Nov. 7 decision to provide conditional support to Rhone Capital's $632-million equity investment in the form of eight-year mandatory convertible preferred shares.

HBC announced on Wednesday that it would not close its deal to issue shares to Rhone until after the OSC hears Land & Buildings' motion.

The funding was part of a deal that included the sale of HBC's (HBC.TO) Lord & Talyor Fifth Avenue building to WeWork Property Advisors for nearly $1.1 billion and to pursue a strategic alliance with WeWork to pursue future real estate transactions.

The owner of Hudson's Bay, Saks Fifth Avenue and Lord & Taylor said it expects Rhone will initially hold a 21.8 per cent voting and equity interest in the company on a partially diluted basis and that could grow to 30 per cent if the preferred shares are held to their eight-year maturity.

Land & Buildings has urged the retailer to consider a bid for its German operations by Signa Holding and criticized HBC for selling a controlling interest in the company without seeking the approval of minority shareholders.

The retailer and its investor have been in a war of words, accusing one another of misleading shareholders regarding the building's sale and the related Rhone Capital investment.

- with files from BNN