Not long after our recent discussion on Canadian fur traders, I heard on the radio that the Hudson's Bay Company was bought out by Americans. What a history -- the company is 336 years old!
Hudson's Bay bows to Zucker's new C$1.5 bln offer
yahoo.reuters.com
Thu Jan 26, 2006 4:16 PM ET
By Sue Thomas
TORONTO, Jan 26 (Reuters) - Canada's oldest corporation, retailer Hudson's Bay Co. <HBC.TO>, accepted a sweetened C$1.5 billion offer from U.S. financier Jerry Zucker on Thursday, ending a tortuous takeover battle.
The announcement ended a scramble by the 336-year-old company -- which is older than Canada itself and started life as a chain of fur-trading posts -- to fend off takeover by Zucker's Maple Leaf Heritage Investments.
Hudson's Bay started bargaining with several bidders last week and talks went through Wednesday night. The department-store operator decided early on Thursday to go with Maple Leaf's sweetened offer of C$15.25 a share. Including debt, the deal comes in at C$1.5 billion ($1.3 billion).
"From Friday evening, right up until this morning we were negotiating with more than one bidder and the board considered multiple offers, and it went right down to this morning," said Hudson's Bay spokesman Rob Moore.
The new offer is up from Zucker's earlier bid of C$1.1 billion, or C$14.75 a share. Conditions put on the deal by Zucker, a big sticking point, have been softened.
"We feel quite confident and satisfied that we, through a fairly robust process, have reached full and fair value in this offer from Maple Leaf for our shareholders," Moore said.
He said there were "mixed emotions" when the sale was announced, but relief that Zucker does not plan big changes at the retailer, whose Bay department stores and Zellers discount chain have struggled to compete with Sears Canada Inc. <SCC.TO> and Wal-Mart Stores Inc. <WMT.N>
Maple Leaf vice-president Robert Johnston said Maple Leaf had "a number of plans, most of them operational" to turn around Hudson's Bay, which has been mired in losses for several quarters.
The plans do not include more layoffs among the company's roughly 70,000-strong staff, he said, but plans announced in November by Hudson's Bay to cut 825 jobs will likely go ahead.
"We don't have any major restructuring initiatives. The company announced layoffs in the last couple of months, and the company will continue to lose the number of Zellers stores while increasing its footprint, which is well under way and my sense is that will continue," Johnston said.
"Our plan is to reinvigorate this company and put it back on a growth projectory."
Zucker has said he wants to accelerate the conversion of Zellers outlets to more broadly stocked big-box format stores able to compete with Wal-Mart.
Shares of Hudson's Bay closed up C$1.10, or 7.8 percent, at C$15.03 on the Toronto Stock Exchange on Wednesday, as investors showed relief that the bitter takeover battle, which started in earnest last October, was finally over.
"I'm happy and relieved. It's been a long, long saga," said one analyst who did not want to be named. "We think it's a fair offer."
While some lament the passing of a Canadian icon, whose land holdings were once bigger than present-day India, into U.S. hands, Johnston said the sentiment is misplaced because American investors already own a big piece of the company.
"I think what's more important to focus on is that this company now has a strong financial backer that is committed to the company and to growing the company," he said.
"He's (Zucker) not a short-term investor, he really wants to see the company prosper and he will take the initiative to make that happen."
($1=$1.15 Canadian) |
