Dive Brief:
- Hudson's Bay Co. opted to reject an offer for its German unit, the Canadian department store retailer said on Wednesday.
- The unsolicited offer last fall from Signa Holding, the owner of Hudson's Bay's main German competitor, was reported to be around $3.5 billion. David Leith, lead independent director of Hudson's Bay's board, said in a statement the offer "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."
- Executive Chairman and interim CEO Richard Baker said in a statement, "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.”
Dive Insight:
Activist investors have been pushing Hudson's Bay for more than half a year to liquidate its prime real estate holdings and other assets.
The Canadian retailer's loudest activist, the hedge fund Land & Buildings, called on the retailer in the fall to "seriously consider" Signa's offer. (Spokespeople for Land & Buildings did not reply to requests for comment about the rejection of Signa's offer.)
Hudson's Bay — which owns Saks Fifth Avenue and Lord & Taylor, among other brands — has made some moves to reap cash from its assets, including the sale of its Manhattan Lord & Taylor flagship, the prospective sale of its Vancouver namesake brand flagship and the abrupt departure of a CEO.
It hasn't been enough to quiet the activists. Land & Building's Jonathan Litt in a January letter said the company's stock was still undervalued given its real estate holdings and called on the company to take itself private.
The year ahead promises to be an interesting one for the retailer. Along with the pressure from activists, the company recently brought in a new CEO, has shown interest in acquiring rivals and might make good on the demands to go private.
