A special committee of the Hudson’s Bay Co.’s board on Thursday sought again to warn its shareholders from hastening toward an offer by Canadian private equity firm Catalyst Capital Group Inc. to buy some 10.8 percent of the company’s shares, while the committee is still gauging the value of the shares.
The committee of HBC’s board issued its warning a day before an updated offer by Catalyst to buy the shares at 10.11 Canadian dollars each, was due to expire on Friday. That would amount to a total of $200 million, according to a statement by Catalyst Thursday.
Catalyst’s offers have come amid the proposal by another group of important HBC shareholders including its executive chairman Richard Baker to take the company private. The special committee said in a statement Thursday that the Catalyst deal was “not a true alternative” to the proposed deal by the HBC shareholders, which the committee described as a privatization transaction.
Under the privatization offer, the company would acquire all the minority shareholders’ common shares for 9.45 Canadian dollars each. Baker and his group together already own 57 percent of the voting shares.
“The special committee reiterates its advice to shareholders to exercise caution regarding a decision to tender to the amended catalyst offer,” the committee said in the statement, referring to Catalyst’s revised offer from Aug. 7. Catalyst had first made its offer in July 22 to buy a smaller number of outstanding shares, about 8 percent, but at the same price.
Catalyst’s revised offer expires on Friday, but the special committee said that it won’t be done assessing the value of the shares until September. The committee has previously also said the HBC shareholders’ offer for the privatization deal wasn’t enough, and said it has asked them to inform it if they plan to revise their offer.
“The special committee wants to remind HBC shareholders that the amended catalyst offer is not a true alternative to the privatization transaction proposed by a group of HBC shareholders,” the committee said in the statement.
Catalyst said in a statement Thursday that its offer was better than that of Baker and his group.
“Catalyst is offering HBC shareholders that wish to participate in our offer an opportunity to receive an immediate premium to the market price of HBC shares and to the Baker group’s proposal,” said Gabriel de Alba, Catalyst’s managing director and partner. “Catalyst is prepared to be a long-term holder of HBC shares and to work with the special committee of the board to maximize value, which may be a near or long-term event.”