With the acquisition, HBC creates a premier North American fashion retail business centered on three iconic retail brands – Hudson’s Bay, Lord & Taylor and Saks Fifth Avenue. The combined Company will operate a total of 320 stores, including 179 full-line specialty department stores, 72 outlet stores and 69 home stores in prime locations throughout the U.S. and Canada, along with three e-commerce sites.

The all-cash transaction was financed by a combination of new debt financing (the “Debt Financing”) and approximately US$1 billion of new equity issued by way of a bought deal prospectus offering of 16,050,000 subscription receipts (the “Subscription Receipts”) and a private placement of common shares and common share purchase warrants (the “Private Placement”).

With the completion of the Acquisition, each Subscription Receipt was automatically exchanged into one common share of the Company through the non-certificated inventory system of CDS Clearing and Depositary Services Inc. HBC expects that the Subscription Receipts will be immediately halted from the Toronto Stock Exchange and de-listed after markets close.

Concurrently with the Acquisition, the Company closed a non-brokered private placement pursuant to which an aggregate of 40,050,001 common shares and an aggregate of 5,250,000 common share purchase warrants were issued to HS Investment L.P. (“HSILP”), an affiliate of Ontario Teachers’ Pension Plan, and funds advised by West Face Capital Inc. As previously disclosed, an additional 1,500,000 Warrants were issued to HSILP on July 28, 2013 in consideration of HSILP’s equity investment. All securities issued in connection with the Private Placement are subject to a four month hold period from the date of issuance in accordance with applicable securities laws.

The Debt Financing consists of a US$2 billion senior secured term loan, a US$300 million junior secured term loan and a US$950 million asset-based loan, the proceeds of which were used to finance the Acquisition and related fees and expenses and to refinance certain of the existing debt of the Company and Saks.

Hudson's Bay Company