Hudson's Bay receives counterbid from Catalyst Capital

Private equity firm Catalyst Capital Group Inc on Wednesday made a competing offer for Hudson’s Bay Co that challenges the Canadian retailer’s deal with a consortium led by its executive chairman, Richard Baker.

Catalyst, which owns 17.5% of Hudson’s Bay, has bid C$11 per share, topping Baker’s C$10.30 per share offer in October and valuing the company at C$2.03 billion ($1.53 billion).

Shares of the Saks Fifth Avenue owner rose as much as 14.3% to C$10.09.

Hudson’s Bay on Wednesday confirmed that it had received the unsolicited proposal from Catalyst and that its special committee would review the offer.

Separately, the Baker-led consortium, which owns 57% of Hudson’s Bay, said Catalyst’s offer was “non-executable” and not supported by fully committed financing.
The group had previously said it would block the company’s sale to another party.

Catalyst said on Wednesday it had filed a complaint with the Ontario Securities Commission over potential securities law violations in the consortium’s C$1.9 billion deal.

The PE firm said it was prepared to consider raising the offer based on its due diligence and is open to allow other shareholders to be co-equity sponsors to its offer.

Activist shareholder John Litt, who has been opposing the Baker-led group’s offer, said his hedge fund Land’s & Buildings was interested in financially participating in the deal with Catalyst, should it move forward.

Reuters reported earlier this month that Catalyst was seeking financing for a rival bid for Hudson’s Bay.

The buyout firm’s all-cash offer represents a premium of 24.5% to Hudson’s Bay’s closing price on Tuesday.