An unsolicited offer from Catalyst Capital Group proposes to acquire up to 14.8m common shares of HBC for CAD10.11 per common share in cash

An unsolicited offer from Catalyst Capital Group proposes to acquire up to 14.8m common shares of HBC for CAD10.11 per common share in cash

Canadian retailer Hudson's Bay Company (HBC) shareholders have received an offer from private equity firm Catalyst Capital Group to purchase up to CAD150m worth of shares in the firm.

Catalyst has offered to purchase up to 14.8m common shares of HBC for CAD10.11 each.

The move comes after HBC's board formed a special committee last month to review and evaluate the proposal from a group of HBC stakeholders to privatise the company at a price of CAD9.45 per share, payable in cash.

The group submitting the proposal are all linked to Richard Baker, governor and executive chairman of HBC, Rhône Capital, WeWork Property Advisors, Hanover Investments (Luxembourg), and Abrams Capital Management – and collectively own about 57% of the outstanding common shares of HBC.

Activist investor Land & Buildings Investment Management criticised the offer as "woefully inadequate," with founder and CIO Jonathan Litt saying it "materially undervalues the exceptional assets the company owns."

Now HBC, which has retained TD Securities to prepare a formal valuation of its common shares, says its special committee has invited a number of shareholders to share their views regarding the privatisation proposal directly and noted it will consider Catalyst's offer in conjunction with its ongoing review.

According to Reuters, Catalyst said Baker's proposal "greatly undervalues the company."

In its most recent first-quarter earnings release, HBC CEO Helena Foulkes said the retailer was making progress on a "number of crucial fronts" despite a drop in first-quarter sales