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December 7, 2017

HBC closes US$500m Rhône Capital investment deal

Canadian retailer Hudson's Bay Company (HBC) has announced the closing of the previously announced US$500m equity investment by an affiliate of private equity firm Rhône Capital.

By Beth Wright

Canadian retailer Hudson’s Bay Company (HBC) has announced the closing of the previously announced US$500m equity investment by an affiliate of private equity firm Rhône Capital.

The net proceeds from the transaction will be used to repay outstanding borrowings on HBC’s asset-based revolving facility, which will reduce interest expense and strengthen its balance sheet.

Announced in October, the series of transactions will see Rhône buy $500m of convertible shares in HBC, and partner with WeWork to form a joint venture – WeWork Property Advisors – to buy HBC’s Lord & Taylor building in New York for $850m.

HBC to sell Lord & Taylor flagship for US$850m

HBC, Rhône Capital deal moves forward

In connection with the closing of the transaction, HBC has appointed Steven Langman, managing director of Rhône, and Eric Gross, managing partner of WeWork Property Investors, to the board of directors of HBC.

Meanwhile, the retailer has also announced the receipt of a US$75m deposit in connection with the sale of its Lord & Taylor Fifth Avenue building, subject to customary adjustments. The deposit is non-refundable subject to certain limited exceptions.

HBC says it currently expects the sale to close no later than 10 August 2018, subject to the satisfaction of applicable conditions.

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