{"id":1004330273,"date":"2019-06-12T02:42:44","date_gmt":"2019-06-12T10:42:44","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004330273"},"modified":"2019-06-12T07:17:23","modified_gmt":"2019-06-12T15:17:23","slug":"hbc-plans-1-5b-sale-of-german-retail-holdings-to-jv-partner","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/hbc-plans-1-5b-sale-of-german-retail-holdings-to-jv-partner\/","title":{"rendered":"HBC Plans $1.5B Sale of German Retail Holdings to JV Partner"},"content":{"rendered":"
\"Image<\/a>

Image via Pixabay <\/em><\/p><\/div>\n

Less than a year after HBC merged its European business with SIGNA Retail Holdings and the companies combined two top German department store chains, Canadian-based HBC is selling its remaining stake in the German joint venture and divesting the related retail joint venture with SIGNA for $1.5 billion. Part of the net proceeds will be used to repay an outstanding $436 million loan, fortifying the company\u2019s balance sheet.<\/p>\n

HBC, which owns Saks Fifth Avenue, Hudson\u2019s Bay, Lord & Taylor and Saks Off 5th<\/sup> had entered the German retail market<\/a> in June 2015 with a huge $2.7 billion deal to acquire Galeria Holding, the parent company of Germany\u2019s top department store chain, Kaufhof. When HBC merged its European operations with SIGNA in late November, it combined Kaufhof with SIGNA\u2019s Karstadt retail chain. At the time, the plan was to create a stronger, better capitalized retailer that would be better positioned to succeed in the German market and create significant value for HBC shareholders.<\/p>\n

As part of the latest transaction, expected to close this fall, HBC will assume ownership of the Netherlands retail business and release SIGNA from its 50.01 percent back-to-back guarantee of certain obligations of Hudson\u2019s Bay Netherlands. HBC admitted that its Netherlands business has not performed to expectations, which is why the company intends to begin cost-saving initiatives, including store closures in the Netherlands.<\/p>\n

CEO Helena Foulkes called the planned German transaction with SIGNA a milestone that would deliver important financial benefits. She stressed it would solidify HBC\u2019s strategic focus on its North American operations, particularly Saks Fifth Avenue and Hudson\u2019s Bay. Those retail chains are seen as the company\u2019s greatest growth opportunities. In May, HBC said it was considering strategic alternatives for the Lord & Taylor operating business, including a possible sale or merger, as part of its strategy to focus on the strongest opportunities.<\/p>\n

HBC privatization proposal<\/h2>\n

The announcement of the German exit plan, the latest in HBC\u2019s attempts to keep the international company afloat as its stock price tumbles amid an increasingly rocky retail landscape, came the same day as HBC Chairman Richard Baker and other shareholders made an offer to take the company private. HBC\u2019s board of directors formed a special committee of independent directors to review the proposal, which called for privatizing the company at a price of $9.45 in Canadian dollars per share (about $7.11), payable in cash. Baker is being joined by other investors, including Rhone Capital LLC, WeWork Property Advisors, Hanover Investments (Luxembourg) S.A. and Abrams Capital Management LP.<\/p>\n

In 2017, WeWork and Rhone Capital teamed up to buy HBC\u2019s flagship Lord & Taylor building on Fifth Avenue<\/a> in Manhattan for $850 million to serve as WeWork\u2019s new global headquarters. That deal, which gave Lord & Taylor the bottom floors for retail use, was also aimed at lowering HBC\u2019s debt levels. Baker, Rhone Capital, WeWork Property Advisors, Hanover Investments (Luxembourg) S.A. and Abrams Capital Management own about 57 percent of the company\u2019s outstanding common shares.<\/p>\n

Bloomberg<\/em> reported the privatization deal depends on the SIGNA deal closing in the fall. If the company does go private, Baker and others believe it will be easier for them to continue trying to make cost cuts and other changes without shareholder pressure.<\/p>\n

Meanwhile, the special committee has hired Blake, Cassels & Graydon LLP as legal counsel and J.P. Morgan Securities as financial advisor to help it review the privatization proposal from the Baker group. A timetable for the review was not given.<\/p>\n","protected":false},"excerpt":{"rendered":"

The deal comes as HBC and other shareholders, including WeWork Property Advisors, offered a plan to take the Canadian-based retail company private.<\/p>\n","protected":false},"author":1068,"featured_media":1004330276,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21781,21743,21808,16,21783,21742,21749],"tags":[39813,33631,45113],"class_list":["post-1004330273","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-corporate-real-estate","category-deals","category-featured","category-international","category-investment","category-latest","category-retail","tag-hudson-bay-company","tag-j-p-morgan-securities","tag-signa-group"],"acf":[],"yoast_head":"\nHBC Plans $1.5B Sale of German Retail Holdings to JV Partner - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/hbc-plans-1-5b-sale-of-german-retail-holdings-to-jv-partner\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"HBC Plans $1.5B Sale of German Retail Holdings to JV Partner\" \/>\n<meta property=\"og:description\" content=\"The deal comes as HBC and other shareholders, including WeWork Property Advisors, offered a plan to take the Canadian-based retail company private.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/hbc-plans-1-5b-sale-of-german-retail-holdings-to-jv-partner\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2019-06-12T10:42:44+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2019-06-12T15:17:23+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2019\/06\/CORPORATE-ACQUISITION-08.-Image-via-Pixabay.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"620\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Gail Kalinoski\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/hbc-plans-1-5b-sale-of-german-retail-holdings-to-jv-partner\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/hbc-plans-1-5b-sale-of-german-retail-holdings-to-jv-partner\/\",\"name\":\"HBC Plans $1.5B Sale of German Retail Holdings to JV Partner - 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