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Press release from Marketwire

Hudson's Bay Company Announces $140 Million Bought Deal

Secondary Offering of Common Shares by Hudson's Bay Company (Luxembourg) S.a r.l.

Monday, May 12, 2014

Hudson's Bay Company Announces $140 Million Bought Deal

17:22 EDT Monday, May 12, 2014

TORONTO, ONTARIO--(Marketwired - May 12, 2014) -

THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES.

Hudson's Bay Company (TSX:HBC) ("HBC" or the "Company") is pleased to announce today that it and its largest shareholder, Hudson's Bay Company (Luxembourg) S.à r.l. ("LuxCo") and an affiliate thereof (collectively the "Selling Shareholders"), have entered into an agreement with a syndicate of underwriters whereby the Selling Shareholders have agreed to sell as a secondary offering, on a bought deal basis, an aggregate of 7,870,000 common shares of the Company, representing approximately 10.0% of their current holdings, at a price of $17.80 per common share, for aggregate gross proceeds of approximately $140 million (the "Offering"). A portion of the proceeds from the Offering will be used by the Selling Shareholders to pay certain tax obligations. The balance of the proceeds will be distributed to the ultimate shareholders of LuxCo. The Company will not receive any proceeds from the Offering. Following the Offering, LuxCo intends to distribute approximately 59.7 million common shares to its ultimate shareholders on a pro rata basis. Pro forma the Offering and the contemplated distribution, L&T B (Cayman) Inc. and its shareholders will own or control approximately 39.6 million of the Company's common shares.

The syndicate of underwriters is led by CIBC, RBC Capital Markets, BMO Capital Markets, TD Securities Inc. and Bank of America Merrill Lynch who will act as joint bookrunners. LuxCo has also granted the syndicate of underwriters an over-allotment option, exercisable in whole or in part at any time until 30 days following the closing of the Offering, to purchase from LuxCo up to an additional 562,000 common shares of the Company for additional gross proceeds of up to approximately $10 million to cover over-allotments, if any, and for market stabilization purposes.

A preliminary short-form prospectus relating to the Offering will be filed shortly with Canadian securities regulatory authorities. Closing of the Offering is expected to occur on or about June 2, 2014 and is subject to certain conditions, including the approval of the Canadian securities regulatory authorities.

The common shares of the Company have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any offer, solicitation or sale of the securities in any state in which such offer, solicitation or sale would be unlawful.

About Hudson's Bay Company

Hudson's Bay Company, founded in 1670, is North America's longest continually operated company. Today, HBC offers customers a range of retailing categories and shopping experiences primarily in the United States and Canada. Our leading banners - Hudson's Bay, Lord & Taylor, Saks Fifth Avenue and OFF 5TH - offer a compelling assortment of apparel, accessories, shoes, beauty and home merchandise. Hudson's Bay is Canada's most prominent national branded department store with 90 full-line locations, one outlet store and thebay.com. Lord & Taylor operates 49 full-line locations primarily in the northeastern and mid-Atlantic U.S., four outlet locations and lordandtaylor.com. Saks Fifth Avenue, one of the world's pre-eminent luxury specialty retailers, comprises 39 full-line U.S. stores, five international licensed stores and saks.com. OFF 5TH offers value-oriented merchandise through 73 U.S. stores and saksoff5th.com. Home Outfitters is Canada's largest kitchen, bed and bath specialty superstore with 69 locations. Hudson's Bay Company trades on the Toronto Stock Exchange under the symbol "HBC".

Forward-Looking Statements

Information in this press release that is not current or historical factual information may constitute forward looking information, including with respect to the timing and completion of the Offering. This information is based on certain assumptions regarding expected growth, results of operations, performance, and business prospects and opportunities. While the Company considers these assumptions to be reasonable, based on information currently available, they may prove to be incorrect. Forward-looking information is subject to a number of risks, uncertainties and other factors that could cause actual results to differ materially from what the Company currently expects. These risks, uncertainties and other factors include, but are not limited to: credit, market, currency, operational, liquidity and funding risks, including changes in economic conditions, interest rates or tax rates, the timing and market acceptance of future products, competition in the Company's markets, the growth of certain business categories and market segments and the willingness of customers to shop at the Company's stores, the Company's margins and sales and those of the Company's competitors, the Company's reliance on customers, risks and uncertainties relating to information management, technology, supply chain, product safety, changes in law, regulations, competition, seasonality, commodity price and business disruption, the Company's relationships with suppliers and manufacturers, changes to existing accounting pronouncements, the ability of the Company to successfully implement its strategic initiatives, changes in consumer spending, managing our portfolio of brands and our merchandising mix, seasonal weather patterns, economic, social, and political instability in jurisdictions where suppliers are located, increased shipping costs, potential transportation delays and interruptions, the risk of damage to the reputation of brands promoted by the Company and the cost of store network expansion and retrofits, compliance costs associated with environmental laws and regulations, fluctuations in currency and exchange rates, commodity prices, the Company's ability to maintain good relations with its employees, changes in the law or regulations regarding the environment or other environmental liabilities, the Company's capital structure, funding strategy, cost management programs and share price, the Company's ability to integrate acquisitions and the Company's ability to protect its intellectual property.

For more information on these risks, uncertainties and other factors the reader should refer to the Company's filings with the securities regulatory authorities, including the Company's annual information form dated April 30, 2013, which is available on SEDAR at www.sedar.com. Actual results may differ materially from what the Company currently expects. Other than as required under securities laws, the Company does not undertake to update any forward-looking information at any particular time. The reader should not place undue importance on forward-looking information and should not rely upon this information as of any other date. All forward-looking information contained in this press release is expressly qualified in its entirety by this cautionary statement.

FOR FURTHER INFORMATION PLEASE CONTACT:

Contact Information:
Investor Relations: Hudson's Bay Company
Lucas Evans
Senior Vice President, Treasury & Investor Relations
416.861.4444
investorrelations@hbc.com


Media Contact: Hudson's Bay Company
Tiffany Bourre
Director, External Communications
905.595.7184
tiffany.bourre@hbc.com

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