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Institutional Shareholder Services Rejects Plan by Hudson’s Bay Chairperson to Make Firm Private

Institutional Shareholder Services stated Friday it recommends shareholders vote against a program by the chairman of Hudson’s Bay to take the Saks Fifth Avenue owner private after a bid from Catalyst Capital Group topped the offer.

In October, Hudson’s Bay agreed to a C$1.9 billion ($1.4 billion) offer value C$10.30 per share from shareholders guided by Chairperson Richard Baker.

The organization, which collectively owns 57% of Hudson’s Bay, consists of private equity agency Rhone Capital and office-space sharing start-up WeWork’s property subsidiary.

Private equity agency Catalyst Capital Group, which owns 17.5% of Hudson’s Bay and was unhappy with the offer by the Baker-led consortium, offered C$11 a share in November.

Hudson’s Bay shares closed at C$9.13 Friday, in an indication that traders don’t expect either offer to succeed.

Catalyst’s Managing Associate Gabriel de Alba greeted ISS’s decision. He said Catalyst has been working to protect the interests of the minority shareholders, along with offering all shareholders a superior offer to the Baker group.

David Leith, a chairperson of Hudson’s Bay’s special board that negotiated the sale to Baker’s group, said this week that the Catalyst proposal was not an option available to Hudson’s Bay investors.

They could either settle for the Baker-led bid, or Hudson’s Bay would continue as a public firm, he said.

Catalyst has urged Hudson’s Bay shareholders to strike a deal with Baker in a vote scheduled for December 17. Baker’s consortium will be eliminated from the vote on the bid.

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