TORONTO: –(BUSINESS WIRE)–Hudson’s Bay Company (HBC) has entered into an amended arrangement agreement with a group of existing shareholders under which the HBC common shares held by the Company’s other shareholders will be acquired by HBC for $11.00 in cash per share.

The Hudson’s Bay Company is a Canadian retail business group. A fur trading business for much of its existence, Hudson’s Bay now owns and operates retail stores in Canada and the United States. The company had sold most of its European operations by August 2019 and its remaining stores, in the Netherlands, were to be closed by the end of the year.

Hudson’s Bay and the continuing shareholders have also entered into a voting and support agreement with The Catalyst Capital Group, HBC’s largest minority shareholder, under which Catalyst has agreed to vote the 32,236,878 common shares it controls in favour of the privatization transaction.

David Leith, Chair of the Special Committee of the HBC Board of Directors, said, “We are pleased to have reached agreement with the Continuing Shareholders for a privatization transaction at a substantially increased price, which provides Minority Shareholders with compelling and immediate value and is supported by our largest Minority Shareholder. I would like to commend Catalyst on their constructive approach to getting a transaction agreed which we believe is in the best interests of the Company and the Minority Shareholders.”

Hudson’s Bay intends to hold the special meeting of shareholders to approve the privatization transaction in February 2020. The transaction requires the approval at the special meeting of (i) at least 75% of the votes cast by shareholders, and (ii) a simple majority of the votes cast by common shareholders, excluding for this purpose votes attached to common shares required to be excluded pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions.

Votes cast by Catalyst will be included in determining whether approval is reached under both tests.

In view of the increased consideration payable to minority shareholders, the Company’s operating results since October 20, 2019 (during which period revenues have been lower than anticipated) and the period of time since the issuance of the independent valuation originally provided by TD Securities Inc. in connection with the privatization transaction, the Special Committee has requested that TD Securities prepare an updated valuation and fairness opinion.

The Special Committee has also requested new fairness opinions from its financial advisors, J.P. Morgan and Centerview Partners LLC, in respect of the increased consideration payable to Minority Shareholders. The updated valuation and new fairness opinions will be included in the amended management information circular that will be mailed to shareholders in advance of the special meeting of shareholders.

In the event that TD Securities provides a formal valuation range of the common shares with a lower end that exceeds $11.00 per common share, or the new fairness opinions have not been received by February 14, 2020, HBC is entitled to terminate the Amended Arrangement Agreement.

Catalyst is entitled to terminate the Support Agreement in certain circumstances, including in the event that the amended management information circular (i) has not been filed on SEDAR and mailed to shareholders by February 14, 2020, (ii) does not include the new fairness opinions from the Special Committee’s financial advisors, or (iii) does not include an updated valuation in which the opinion of TD Securities is that the lower end of the range of the fair market value of the common shares is equal to or less than $11.00 per common share.

The Continuing Shareholders or the Company will be entitled to terminate the Amended Arrangement Agreement in the event that the Support Agreement is terminated.