The Ontario Securities Commission announced on Friday that Hudson's Bay Co. (TSX:HBC) has agreed to temporarily postpone a deal that would see private equity firm Rhone Capital buy a sizable stake in the retail giant.
U.S. activist investor Land & Buildings Investment Management LLC applied on Monday for the regulator to review the Toronto Stock Exchange's Nov. 7 decision to provide conditional support to New York-based Rhone's $632-million equity investment in the form of eight-year mandatory convertible preferred shares.
The funding was part of a deal that included the sale of HBC's Lord & Taylor Fifth Avenue building to WeWork Property Advisors for nearly $1.1 billion and to pursue a strategic alliance with WeWork to pursue future real estate transactions.
Per the order issued today, the OSC says HBC and Rhone have agreed to not close the transaction before Dec. 4 or the conclusion of the hearing and review of the TSX decision, whichever date is earlier.
The owner of Hudson's Bay, Saks Fifth Avenue and Lord & Taylor said it expects Rhone will initially hold a 21.8 per cent voting and equity interest in the company on a partially diluted basis and that could grow to 30 per cent if the preferred shares are held to their eight-year maturity.
Land & Buildings has urged the retailer to consider a bid for its German operations by Signa Holding and criticized HBC for selling a controlling interest in the company without seeking the approval of minority shareholders.
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