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Hudson's Bay to acquire Saks for US $16 per share
29
Jul '13
Hudson’s Bay Company and Saks Incorporated announced that they have entered into a definitive merger agreement whereby HBC will acquire Saks for US$16.00 per share in an all-cash transaction valued at approximately US$2.9 billion, including debt.

The transaction has been approved by each company’s board of directors and is expected to close before the end of the calendar year, subject to approval by Saks shareholders, regulatory approvals and other customary closing conditions.

This transaction will bring together three of the retail industry’s most iconic brands – Hudson’s Bay, Lord & Taylor and Saks Fifth Avenue – to create a leading North American retailer addressing a broad consumer spectrum across the luxury, mid-tier and outlet retail sectors. HBC will continue to build upon Saks’ market-leading position and identity as a luxury retailer.

The combined company will operate 320 stores, including 179 full-line department stores, 72 outlet stores and 69 home stores in prime retail locations throughout the U.S. and Canada, along with three e-commerce sites. The combined company would have generated pro forma sales and normalized EBITDA in fiscal 2012 of approximately C$7.2 billion and C$587 million, respectively, before any synergies. HBC expects to achieve C$100 million of annual synergies within three years.

“This exciting portfolio of three iconic brands creates one of North America’s premier fashion retailers,” stated Richard Baker, HBC’s Chairman and CEO. “I’ve had a long connection with Saks over the years, and am thrilled to bring one of the world's most recognized luxury retailers into the HBC family.

With the addition of Saks, HBC will offer consumers an unprecedented range of retailing categories and shopping experiences. This acquisition will increase our growth potential both in the U.S. and Canada, generate significant efficiencies of scale, add to our powerful real estate portfolio and deliver substantial value to our shareholders.”

Steve Sadove, Chairman and CEO of Saks, commented, “We believe this transaction delivers compelling value to our shareholders and that Saks Fifth Avenue is an excellent fit within the HBC organization. We also believe that HBC recognizes the tremendous value of our people, our real estate, our customer and vendor relationships, and most importantly the power and potential of our iconic brand.

"The $16 per share price represents an approximate 30% premium to the May 20, 2013 closing price, the day before media speculation began. We have made significant progress over the past few years to position Saks for future growth and to evolve into an omni-channel retailer. We are excited about what this opportunity and being part of a much larger enterprise can mean for the future of the Saks Fifth Avenue brand.”

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Saks Incorporated


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