HBC has signed a non-binding letter of intent with respect to the exploration of a potential joint venture

HBC has signed a non-binding letter of intent with respect to the exploration of a potential joint venture

Canadian retailer Hudson's Bay Company (HBC) has confirmed it is in talks with retail estate business Signa Holding regarding a potential joint venture (JV) but denied it has signed an agreement to offload half of its European business or properties.

In a statement on Friday (6 July), HBC said it is in discussions with the firm, which owns its principal German competitor, and has signed a non-binding letter of intent with respect to the exploration of a deal.

However, contrary to recent reports, the retailer said it has not signed a binding agreement to sell or combine its European business or properties.

"HBC regularly evaluates potential strategic opportunities to create value for its shareholders. From time to time, this process leads to discussions with potential counterparties," the retailer said.

While HBC does not generally comment publicly on market speculation or rumours, "in light of recent media reports", the firm found it prudent to advise stakeholders that it is in discussions with Signa regarding a potential joint venture, but noted any potential transaction is subject to further review.

"There can be no assurance that any such discussions will ultimately lead to a transaction," it added. "HBC does not anticipate issuing any further public statement regarding any rumours or speculation in the marketplace unless required by applicable laws."

The statement follows numerous reports last week that claimed the Canadian retailer has agreed to sell about half of its European business to Signa in a deal that will bring together two major German department store chains.

The agreement, described as a "proposed merger of equals for the European department store business" by German magazine WirtschaftsWoche, was signed by both parties on 3 July, the weekly reported, according to Reuters.

HBC rejected an offer for its Galeria Kaufhof business by Signa earlier this year, stating the unsolicited proposal significantly undervalued its German business.