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Hudson’s Bay Co.’s board of directors has rebuffed Catalyst Capital Group Inc. and its $2-billion proposal to take over the retailer, saying the bid would have no chance of winning over the majority stake controlled by HBC executive chairman Richard Baker.

Catalyst proposed last week to offer $11 a share in cash for HBC in an attempt to thwart Mr. Baker and his allies, which have offered $10.30 for the minority shares in a plan to privatize the company.

The Baker group controls 57 per cent of the stock and has said it has no intention to sell, an assertion it reiterated to the five-director panel.

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In a statement issued late on Monday, the special committee said “the unsolicited proposal from the Catalyst Capital Group Inc. to acquire HBC is not reasonably capable of being consummated.” Therefore, it can’t be considered a superior proposal, it said.

It issued the statement after an extended study of Catalyst's proposal, which was not a formal bid. The private-equity firm had said it had lined up financing and was prepared to make an offer.

Its own offer spurned, Catalyst, led by Toronto financier Newton Glassman, said it has applied to the Ontario Securities Commission, asking for a hearing into what it said are “numerous omissions and misrepresentations” in the management information circular for the Baker group’s bid. That arrangement won the recommendation of the special committee.​

Catalyst is among a handful of minority shareholders opposing the bid, saying it undervalues the company’s real estate to the benefit of the executive chairman and his fellow bidders. Catalyst has 17.5 per cent of the shares. To be successful, Mr. Baker and his allies must garner a majority of the minority shares at a vote set for Dec. 17.

The group includes Rhone Capital LLC, WeWork Property Advisors, Hanover Investments (Luxembourg) SA and Abrams Capital Management LP.​

It announced a plan to privatize HBC last June, saying the move would allow the company to complete its turnaround of the struggling retail operations away from the attention of public shareholders who have seen their investments dwindle despite a series of asset sales and store closures.

But Catalyst and other minority shareholders have complained that the money on offer does not reflect the value of its properties, some of which are in prime locations such as Midtown Manhattan and downtown Vancouver.

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In the Baker group bid already accepted by the board, the real estate makes up $8.75 a share, well under previous estimates of more than $20. Last month, the controlling shareholders released a set of property appraisals, and said they showed the difficulty in arriving at higher values due to differing real estate and retail market conditions in the various regions.

Catalyst said in a statement it asked the OSC to block the transaction, or force the Baker group to amend the information circular. It alleges that the process for developing the bid was flawed, and precluded any search for alternative deals. It said the company failed to provide summaries of key valuations done previously, including calculations relating to the flagship Saks store in New York.

It also said it is challenging HBC’s reliance on “deficient valuations and appraisals” for the bid.

A spokesman for the Baker group said it had no immediate comment on the board committee’s ruling on Catalyst’s proposal or Catalyst’s application to the OSC.

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