There are at least four potential bidders that have indicated their interest in acquiring part of the Hudson's Bay Co. or its assets. The exterior of a Hudson's Bay store in Hamilton, Ont., is pictured on March 20.Katherine KY Cheng/Getty Images
Multiple parties have expressed interest in the sale process for Hudson’s Bay Co., according to two sources with knowledge of the process, whom The Globe and Mail is not naming because they were speaking about confidential matters.
There are at least four potential bidders that have indicated their interest in acquiring part of the business or its assets, one of the sources said.
Canada’s oldest retailer, faltering under mounting losses and $1.1-billion in debt, was granted court protection from its creditors on Mar. 7 under the Companies’ Creditors Arrangement Act. The court has approved the process now under way, to solicit possible investment in a restructuring plan for the business, as well as bids to acquire all or part of the operations and assets of Hudson’s Bay Co.
Final binding sale proposals and investment proposals are due on April 30, and some of the parties that have expressed interest may choose not to bid. The company also has the right to reject any or all bids, according to documents filed with the court explaining the sale.
The first deadline in the process arrived Monday, when Hudson’s Bay Co. “and any related person” wishing to submit or participate in such a proposal had to declare their intentions to the court monitor and to Reflect Advisors LLC, the financial advisers overseeing the bids.
“It is not appropriate for us to comment at this time,” Adam Zalev, Reflect’s co-founder and managing director, wrote in an e-mail when asked Monday whether they had received any such declarations.
Hudson’s Bay has put forward a restructuring plan, which would save six department stores that have so far been left out of the Bay’s liquidation sales, as well as its e-commerce operations, according to a confidential information memorandum distributed to potential bidders, which was obtained by The Globe. That plan would require buyers or investors to put $82-million into the operations in the first year, the memo stated.
But those retail operations are not the only part of the business that could attract bidders. Other parts of the business up for sale include the Bay’s intellectual property, such as its historic stripe design that adorns point blankets and other merchandise; HBC’s 78-per-cent stake in a real estate joint venture with RioCan Real Estate Investment Trust; as well as an art collection and other artifacts and memorabilia.
A separate process is seeking to monetize the Bay’s store leases across the country, for which bids are due on May 1.
Now that the deadline for company insiders to declare their interest has passed, other parties have three weeks to decide whether they will submit a proposal.
At the outset of the process, Reflect sent a “teaser letter” to a list of known potential bidders to invite them to express interest. Those deemed to be “qualified bidders” received the confidential memorandum.
One person who has already publicly declared her interest is Chinese billionaire Weihong Liu, the chair of retail investment company Central Walk, which owns three shopping centres in B.C. Ms. Liu has discussed her intention to bid on some of the Bay’s stores in posts on social-media platform RedNote. When asked to confirm Ms. Liu’s intentions for the Bay, the executive director of public relations for Central Walk, Hefe Fang Sun, declined to comment.
Any final bids will have to include an irrevocable financing commitment or other evidence that the bidder is financially capable of completing the deal. Final bidders must also specify how many Bay employees they will keep on as part of an acquisition of or investment in the business. And bidders will deposit at least 10 per cent of the proposed purchase price to the CCAA monitor, Alvarez & Marsal Canada Inc., to be held in trust.
After the bids are received, Hudson’s Bay will consult with Reflect Advisors and Alvarez & Marsal to either select a favoured bidder to negotiate an agreement, or proceed to an auction to choose the “highest and best” bid, which will happen on or around May 16.
Hudson’s Bay also reserves the right to choose one or more successful bids “that did not offer the highest purchase price for the property or the business,” according to a document describing the process, which was filed in court.
The results of the bidding process will be made public by the end of May. Hudson’s Bay will apply for court approval to enter into agreements with any chosen investors or buyers no later than May 30.
Hudson’s Bay has been severely affected by falling sales and traffic, both online and in stores. In the 2024 fiscal year, the retailer’s total sales declined by nearly 33 per cent to $1.11-billion, according to the confidential memo obtained by The Globe. The company recorded a loss of nearly $330-million last year, according to documents previously filed in court.