HBC Announces Agreement with Land & Buildings
December 01 2017 - 10:41AM
Business Wire
HBC (TSX: HBC) (the “Company”) today announced that it has
reached an agreement with Land & Buildings to withdraw its
appeal of the Toronto Stock Exchange’s (TSX) decision to
conditionally approve the previously announced equity investment by
Rhône Capital. HBC has otherwise fulfilled all regulatory
requirements to complete the transaction and anticipates closing to
take place on or about December 6, 2017.
As part of the agreement with Land & Buildings, HBC has
agreed that if it determines to issue equity in a transaction that
will trigger the one-year price protection feature under the
mandatorily convertible preferred shares to be issued on closing to
Rhône Capital, then it will do so by conducting a rights offering
(by circular or prospectus) to all of its shareholders on a pro
rata basis. As the Rhône Capital equity investment, together with
the sale of the Lord & Taylor Fifth Avenue building to WeWork
Property Advisors, are expected to provide HBC with enhanced
liquidity and significantly strengthen its balance sheet, HBC
currently does not anticipate that these price protection
provisions will be triggered. Land and Buildings has also provided
a customary standstill in favour of HBC for a period extending
through HBC’s 2018 annual general meeting of shareholders.
“We are excited to close the Rhône equity investment next week
and commence our global, multi-faceted strategic relationship with
WeWork,” said Richard Baker, HBC’s Governor, Executive Chairman and
Interim CEO. “This unique set of transactions demonstrates our
ability to successfully monetize our valuable real estate assets,
while creating opportunities to improve productivity and
utilization in our portfolio. As part of our ongoing board review,
we will continue to review HBC’s real estate portfolio with a view
to maximizing shareholder value and the ongoing operations and
business of HBC. We look forward to ongoing engagement with, and
constructive input from, Land & Buildings and our other
shareholders as we pursue additional opportunities.”
“We invested in HBC because its world class real estate assets
are substantially more valuable than the Company’s current share
price,” said Jonathan Litt, Founder & CIO, Land & Buildings
Investment Management LLC, “We appreciate our interaction with the
HBC team and are pleased and encouraged that HBC’s management and
Board continues to take steps to monetize its highly valuable real
estate assets, and we look forward to continuing to work
collaboratively with the Company to ensure that shareholder value
is maximized.”
As per the Rhône agreement and prior disclosures, under certain
circumstances, HBC has the right to convert the preferred shares
after the third anniversary and will continue to make decisions and
review all opportunities seriously using its business
judgement.
About HBC
HBC is a diversified global retailer focused on driving the
performance of high quality stores and their all-channel offerings,
growing through acquisitions, and unlocking the value of real
estate holdings. Founded in 1670, HBC is the oldest company in
North America. HBC's portfolio today includes formats ranging from
luxury to premium department stores to off price fashion shopping
destinations, with more than 480 stores and over 66,000 employees
around the world.
HBC's leading banners across North America and Europe include
Hudson's Bay, Lord & Taylor, Saks Fifth Avenue, Gilt, Saks OFF
5TH, Galeria Kaufhof, the largest department store group in
Germany, and Belgium's only department store group Galeria
INNO.
HBC has significant investments in real estate joint ventures.
It has partnered with Simon Property Group Inc. in the HBS Global
Properties Joint Venture, which owns properties in the United
States and Germany. In Canada, it has partnered with RioCan Real
Estate Investment Trust in the RioCan-HBC Joint Venture.
About Land & Buildings
Land & Buildings is a registered investment manager
specializing in publicly traded real estate and real estate related
securities. Land & Buildings seeks to deliver attractive risk
adjusted returns by opportunistically investing in securities of
global real estate and real estate related companies, leveraging
its investment professionals' deep experience, research expertise
and industry relationships.
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Hudson’s Bay CompanyINVESTOR RELATIONS:Elliot
Grundmanis, (646)
802-2469elliot.grundmanis@hbc.comorMEDIA:Andrew Blecher,
(646) 802-4030Andrew.blecher@hbc.com