Saks Inc. detailed the six-month process that led to last month’s deal with Hudson’s Bay Co. in a Securities and Exchange Commission filing Tuesday. Most of the names were redacted, but the players are believed to include Catterton Management as Sponsor A, Neiman Marcus Inc. as Company B and private equity firm KKR & Co. as Sponsor C (which helped Saks make its run at Neiman’s), as well as Ares Management, Holt Renfrew and Starwood Capital.
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This story first appeared in the August 21, 2013 issue of WWD. Subscribe Today.
• Sponsor A calls Saks chairman and chief executive officer Stephen I. Sadove to express interest in an acquisition.
• Sadove meets with senior representatives of Sponsor A.
• Saks’ board mulls “potential strategic transactions” including a buyout by Sponsor A or an acquisition of privately held retailer Company B.
• Sadove meets with Richard Baker, chief of Hudson’s Bay Co., at the request of Baker. A takeover of Saks is discussed.
• The finance and executive committees of Saks’ board meet and direct Sadove to continue evaluating potential transactions. Saks management or the company’s banker, Goldman Sachs, meet with private equity firms Sponsor C and Sponsor D, to discuss “equity financing” for an acquisition of Company B.
WEEK OF APRIL 15
• Saks meets with HBC as well as Sponsor A and that firm’s potential partner in a Saks buyout, Sponsor E.
• Goldman gives Company B’s principal shareholders Saks’ nonbinding acquisition proposal to acquire Company B, which is quickly rejected as “insufficient.”
WEEK OF JUNE 3
• Sponsors A and E prepared to offer $15 to $16 a share for Saks. HBC prepared to offer $15 to $15.25 a share.
• Saks sweetens its offer for Company B with a higher price.
WEEK OF JUNE 10
• A privately held retailer, Company F, steps up as interested in working with Sponsors A and E on a Saks takeover but never takes part in a bid.
• Company B nixes Saks’ proposed price as “still insufficient.”
• Sponsor A drops out and Sponsor E is in discussions with another private equity firm, Sponsor G, as a partner.
• HBC proposes $15.25 a share for Saks.
• Sponsors E and G propose $14.50 to $15.50. Subsequently, Sponsor G leaves the process and Sponsor A rejoins the hunt.
• The senior management of Saks and Company B meet to discuss a possible deal.
• Saks’ board authorizes Goldman Sachs to inform HBC and Sponsors E and A that their proposals were “insufficient.”
• Saks enters a confidentiality agreement with Company B for Saks to engage in due diligence.
• A privately held firm unknown to Saks, Company H, proposes a $2.6 billion cash acquisition, but Goldman cannot locate the appropriate person at Company H to deal with.
• Company B indicates “the parties would be unable to agree on financial terms for a business combination” and Saks’ board concludes it’s not willing to meet Company B’s minimum price.
• Goldman Sachs informs HBC advisors that it “would need to increase the per share price of its offer to at least $16 per share.”
• Talks between Saks and Company B cease.
• There is no indication that Sponsors A and E are prepared to increase their initial price range of $14.50 to $15.50 a share or that they would “be prepared to conclude their diligence more quickly than they had previously indicated.”
• HBC tells Goldman its prepared to offer $16 a share.
• Sadove speaks to Baker on the phone and suggests they meet in person the following day.
• Sadove and Baker meet and discuss opening issues and Saks’ recent results.
• Saks’ board holds a telephone meeting and unanimously agrees to approve the merger.
• Saks and HBC announce a deal with a 40-day go-shop period for Saks to court other buyers.
• None of parties contacted during the go-shop period have submitted a proposal for Saks.