Richard Baker to buy Ontario pension fund stake in retailer

A venture controlled by HBC Chairman Richard Baker will buy the stake owned by a unit of Ontario Teachers’ Pension Plan Board in the Canadian retailer, according to L&T B Cayman, a top shareholder in Hudson’s Bay and a joint buyer. The news was reported by CNBC. Hudson's Bay portfolio includes Saks Fifth Avenue, Lord & Taylor, and Galeria Kaufhof.

The approximately 18 million shares purchased 9 Canadian dollars and 45 cents each by Baker’s company Rupert of the Rhine represents a premium of 28.6 percent to HBC’s close yesterday, L&T B Cayman said.

After the deal is completed L&T B Cayman will own about 25.03 percent of Hudson's Bay on a non-diluted basis.

HBC's primary goal right now is to stave off competition from Amazon, who has been putting a dent in the business of physical retail stores across the nation.

To cut costs, HBC has formed a joint venture with its European business, sold the unprofitable Gilt Groupe, and closed their famous Lord & Taylor flagship store on Fifth Avenue. Plans to close ten more Lord & Taylor stores are underway.

Despite the company's efforts, some investors still aren't happy and want HBC to go as far as to sell Saks Fifth Avenue and their 50 percent interest in the joint European venture. Investors are also calling upon HBC to sell Lord & Taylor, and given the company's declining profitability and depleting fleet of stores, that would be far more logical.

HBC needs to turn things around, and quickly. Shares for the company fell 37 percent over the last year.

photo: via hbcheritage.ca