TORONTO — 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 $1.13, or about 12.8 per cent, at $9.96 in early trading on the Toronto Stock Exchange on Wednesday.
Catalyst already holds a roughly 17.5 per cent stake in HBC. It announced in October that it and other minority shareholders that together control a 28.24 per cent stake of the company’s common shares plan to vote against the offer by the Baker-led group.
Baker’s offer, which is subject to court and regulatory approvals, requires support 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’s offer is independently financed, superior in both value and treatment of shareholders and can be completed in a timely manner, said Gabriel de Alba, managing director and partner of Catalyst.
“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.”
Activist investor Land & Buildings expressed interest in the new proposal.
“We continue to believe that the offer from the Richard Baker Group woefully undervalues Hudson’s Bay and its real estate,” said founder Jonathan Litt in a statement, adding he’s encouraged by the news of Catalyst’s offer.
“Land & Buildings is interested in financially participating in this transaction with Catalyst should it move forward.”
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.
This report by The Canadian Press was first published Nov. 27, 2019.
Companies in this story: (TSX:HBC)
The Canadian Press