Hudson's Bay Co. shares set to open at C$17
Michael J. Knell -- Furniture Today, November 21, 2012
TORONTO — Hudson's Bay Co. has entered into an underwriting agreement that will see it offer slightly fewer than 21.5 million common shares at a price of C$17 per share. If successful, the sale will raise approximately C$365 million.
The offering will be made through the Toronto Stock Exchange and is expected to close on Nov. 26.
Current shareholders - including Richard Baker, chairman of the New York-based NRDC Equity Partners, which acquired HBC in 2008 - will sell just over 6.76 million shares for C$115 million. The company will also issue 14.7 million new common shares, called a treasury offering, to raise another $250 million.
Net proceeds from the treasury offering will be used to pay down debt.
Based on the offering price, HBC will have a market capitalization of $2.04 billion.
Once the deal is closed, HBC's current shareholders will hold 94.8 million shares, approximately 79% of the outstanding total.
The shares have not been registered with U.S. regulators and will not be sold in the U.S.
According to its prospectus, HBC, which includes the Bay and Home Outfitters in Canada and Lord & Taylor in the United States, posted a profit of C$57 million in 2011, after losing C$160 million just two years earlier.
However, the company's sales per square are off the North American average of US$240. The Bay averages sales of $133 per square foot while Lord & Taylor comes in at US$210.
The Bay operates 90 department stores across Canada while Home Outfitters operates 69 locations. Lord & Taylor operates 48 stores in the northeastern United States. All three banners are active furniture merchants, while the Bay also offers mattresses and major appliances.
Industry Related Content
Most Viewed Articles
FTTV: Frontline Friday From F/T