Activist investor Jonathan Litt has called for board change
Hudson’s Bay Co. has announced a deal to maximize the value of its global real estate assets.
The Canadian retailer has around 61 million square feet of real estate in its portfolio worldwide and activist investor Jonathan Litt, founder of hedge fund Land & Buildings Investment Management, has been leading the calls for the value of that space to be unlocked.
The deal announced Tuesday involves WeWork and an affiliate of its WeWork Property Advisors joint venture with Rhone Capital.
It remains to be seen if Litt will be appeased by the news as Monday he was calling for a special shareholders meeting to consider options including leadership change.
“We are evaluating a number of proposals on which we believe the voices of shareholders should be heard – including the removal of directors from the board – and will announce the full slate of proposals and next steps in the special meeting process shortly,” Litt said in a statement to Reuters.
A key element of the deal is the sale of HBC’s Lord & Taylor Fith Avenue building to WeWork Property Advisors which is valued at C$1.075 billion.
WeWork will also lease space within Hudson Bay’s retail properties including the upper floors of its Queen Street, Toronto and Granville Street, Vancouver.
The transaction includes an equity investment by Rhône of U.S.$500 million (C$632 million) in the form of 8-year mandatory convertible preferred shares, initially convertible into the Company’s Common Shares at U.S.$9.82 (C$12.42) per share, which conversion price is subject to adjustment from time to time in accordance with the terms of the Preferred Shares.
Richard Baker, HBC’s Governor, Executive Chairman and interim CEO said that the deal will substantially improve the value proposition of the company’s real estate assets.
“Immediately upon closing, these transactions are expected to significantly strengthen HBC’s balance sheet, enhance our liquidity, and advance our core strategies by monetizing the Lord & Taylor Fifth Avenue building and increasing the productivity of key locations, which taken together, is expected to enable us to drive ongoing value creation,” he said.
The transaction is expected to reduce HBS’s debt and/or add incremental cash to its balance sheet of C$1.6 billion and increase total liquidity to around $1.1 billion.
The Canadian retailer has around 61 million square feet of real estate in its portfolio worldwide and activist investor Jonathan Litt, founder of hedge fund Land & Buildings Investment Management, has been leading the calls for the value of that space to be unlocked.
The deal announced Tuesday involves WeWork and an affiliate of its WeWork Property Advisors joint venture with Rhone Capital.
It remains to be seen if Litt will be appeased by the news as Monday he was calling for a special shareholders meeting to consider options including leadership change.
“We are evaluating a number of proposals on which we believe the voices of shareholders should be heard – including the removal of directors from the board – and will announce the full slate of proposals and next steps in the special meeting process shortly,” Litt said in a statement to Reuters.
A key element of the deal is the sale of HBC’s Lord & Taylor Fith Avenue building to WeWork Property Advisors which is valued at C$1.075 billion.
WeWork will also lease space within Hudson Bay’s retail properties including the upper floors of its Queen Street, Toronto and Granville Street, Vancouver.
The transaction includes an equity investment by Rhône of U.S.$500 million (C$632 million) in the form of 8-year mandatory convertible preferred shares, initially convertible into the Company’s Common Shares at U.S.$9.82 (C$12.42) per share, which conversion price is subject to adjustment from time to time in accordance with the terms of the Preferred Shares.
Richard Baker, HBC’s Governor, Executive Chairman and interim CEO said that the deal will substantially improve the value proposition of the company’s real estate assets.
“Immediately upon closing, these transactions are expected to significantly strengthen HBC’s balance sheet, enhance our liquidity, and advance our core strategies by monetizing the Lord & Taylor Fifth Avenue building and increasing the productivity of key locations, which taken together, is expected to enable us to drive ongoing value creation,” he said.
The transaction is expected to reduce HBS’s debt and/or add incremental cash to its balance sheet of C$1.6 billion and increase total liquidity to around $1.1 billion.
