Canadian retailer Hudson’s Bay Company (HBC) has rejected a bid for its Galeria Kaufhof business from the owner of its principal German competitor – retail estate business Signa Holding.

Shares in HBC surged by more than 9% in November last year when the company confirmed it had received a bid for its German business and related real estate assets.

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HBC shares surge on Galeria Kaufhof bid confirmation

But in an announcement yesterday (7 February), the Canadian retailer said after a careful review and consideration conducted in consultation with its financial and legal advisors – which included an in-person meeting with Signa and its advisors – its board of directors unanimously rejected the unsolicited proposal.

As a result, Signa has withdrawn its offer, thus concluding discussions.

“The board has unanimously concluded that Signa’s proposal is not in the best interest of HBC’s shareholders,” said David Leith, lead independent director of the board. “It significantly undervalues our German business and related real estate assets and is not supported by sufficient certainty of financing to warrant further consideration at this time.”

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Richard Baker, who was acting as interim-CEO prior to the appointment of  Helena Foulkes yesterday, said HBC appreciates the interest in its European business and real estate assets, which validates its view of the “considerable underlying value” these assets provide to HBC’s shareholders.

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He added: “Our European business and related real estate assets represent critical components of our long-term strategy and we continue to have a high degree of confidence in our ability to drive results across our iconic retail banners.”