ISS recommends shareholders vote against Baker-led offer for HBC

TORONTO — An influential proxy advisory service is recommending shareholders vote against a takeover offer for Hudson's Bay Co. by a group led by the retailer's executive chairman.

TORONTO — An influential proxy advisory service is recommending shareholders vote against a takeover offer for Hudson's Bay Co. by a group led by the retailer's executive chairman.

Institutional Shareholder Services raised concerns about the disclosures surrounding the $10.30 per share offer by a group led by HBC executive chairman Richard Baker.

A rival offer of $11 per share made by Catalyst Capital Group has been rejected by HBC's special committee because it says the Baker-led group, which holds a 57 per cent stake in the retailer, is not interested in selling its shares.

ISS raised questions about the thoroughness of the sale process and if the agreed transaction maximizes value for minority HBC shareholders.

However, the special committee at HBC says the ISS report is flawed and urged shareholders to support the offer by the Baker-led group. It pointed to an acknowledgment by ISS that there is meaningful downside risk if shareholders don't approve the deal.

Catalyst has asked a regulator to block the privatization bid or, at least, require HBC to amend its information circular. The Ontario Securities Commission is scheduled to hear that matter on Wednesday.

This report by The Canadian Press was first published Dec. 9, 2019.

Companies in this story: (TSX:HBC)

The Canadian Press