Hudson's Bay Company
TSX : HBC

Hudson's Bay Company

April 08, 2015 16:44 ET

Hudson's Bay Company Announces $316 Million Bought Deal Secondary Offering

TORONTO, ONTARIO--(Marketwired - April 8, 2015) -

THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES.

Hudson's Bay Company (TSX:HBC) ("HBC" or the "Company") is pleased to announce today that it, Hanover Investments (Luxembourg) S.A. ("Hanover") and 2380162 Ontario Limited (together with Hanover, the "Selling Shareholders") have entered into an agreement with a syndicate of underwriters whereby the Selling Shareholders have agreed to sell as a secondary offering, on a bought deal basis, an aggregate of 11,600,000 common shares of the Company at a price of $27.25 per common share, for aggregate gross proceeds of approximately $316 million (the "Offering"). The Company is not selling any common shares in the Offering and will not receive any of the proceeds therefrom.

The syndicate of underwriters is led by RBC Capital Markets and BMO Capital Markets who will act as joint bookrunners. Unless otherwise agreed to between the Selling Shareholders, 2380162 Ontario Limited has also granted the syndicate of underwriters an over-allotment option, exercisable in whole or in part at any time until 30 days following the closing of the Offering, to purchase up to an additional 1,740,000 of its common shares of the Company for additional gross proceeds of up to approximately $47 million to cover over-allotments, if any, and for market stabilization purposes.

Immediately following the closing of the Offering, Hanover will own approximately 27.5 million common shares representing approximately 15.1% of the common shares of the Company and 2380162 Ontario Limited will own approximately 24.3 million common shares and previously issued warrants to acquire 5 million common shares representing in the aggregate approximately 15.6% of the partially diluted (assuming the exercise of 2380162 Ontario Limited's warrants only) common shares of the Company (14.7% if the over-allotment option is exercised in full).

In addition, Hanover will continue to hold a proxy to exercise voting rights attached to such number of common shares of the Company held by Hudson's Bay Trading Company, L.P. that is equal to Hanover's percentage interest in Hudson's Bay Trading Company, L.P. The Selling Shareholders and HBC have agreed not to sell any equity securities of the Company for a period of 90 days from the closing of the Offering, subject to customary exceptions.

Commenting on the Offering, Richard Baker, Governor and Executive Chairman of HBC stated, "We are pleased to once again have the opportunity to expand our shareholder base and increase the size and liquidity of or publicly traded common share float. The successful completion of this offering will further broaden the base of institutional and individual shareholders who share our vision and believe in the future growth and prosperity of the Hudson's Bay Company."

A preliminary short-form prospectus relating to the Offering will be filed shortly with Canadian securities regulatory authorities. Closing of the Offering is expected to occur on or about April 28, 2015 and is subject to certain customary conditions.

The common shares of the Company have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any offer, solicitation or sale of the securities in any state in which such offer, solicitation or sale would be unlawful.

About Hudson's Bay Company

Hudson's Bay Company, founded in 1670, is North America's longest continually operated company. Today, HBC offers customers a range of retailing categories and shopping experiences primarily in the United States and Canada. Our leading banners - Hudson's Bay, Lord & Taylor, Saks Fifth Avenue and Saks Fifth Avenue OFF 5TH - offer a compelling assortment of apparel, accessories, shoes, beauty and home merchandise. Hudson's Bay is Canada's most prominent department store with 90 full-line locations, two outlet stores and thebay.com. Lord & Taylor operates 50 full-line locations primarily in the northeastern and mid-Atlantic U.S., four Lord & Taylor outlet locations and lordandtaylor.com. Saks Fifth Avenue, one of the world's pre-eminent luxury specialty retailers, comprises 39 U.S. stores, five international licensed stores and saks.com. OFF 5TH offers value-oriented merchandise through 78 U.S. stores and saksoff5th.com. Home Outfitters is Canada's largest kitchen, bed and bath specialty superstore with 67 locations. Hudson's Bay Company trades on the Toronto Stock Exchange under the symbol "HBC".

Forward-Looking Statements

Information in this press release that is not current or historical factual information may constitute forward looking information, including with respect to the timing and completion of the Offering. This information is based on certain assumptions regarding expected growth, results of operations, performance, and business prospects and opportunities. While the Company considers these assumptions to be reasonable, based on information currently available, they may prove to be incorrect. Forward-looking information is subject to a number of risks, uncertainties and other factors that could cause actual results to differ materially from what the Company currently expects. These risks, uncertainties and other factors include, but are not limited to: credit, market, currency, operational, liquidity and funding risks, including changes in economic conditions, interest rates or tax rates, the timing and market acceptance of future products, competition in the Company's markets, the growth of certain business categories and market segments and the willingness of customers to shop at the Company's stores, the Company's margins and sales and those of the Company's competitors, the Company's reliance on customers, risks and uncertainties relating to information management, technology, supply chain, product safety, changes in law, regulations, competition, seasonality, commodity price and business disruption, the Company's relationships with suppliers and manufacturers, changes to existing accounting pronouncements, the ability of the Company to successfully implement its strategic initiatives, changes in consumer spending, managing our portfolio of brands and our merchandising mix, seasonal weather patterns, economic, social, and political instability in jurisdictions where suppliers are located, increased shipping costs, potential transportation delays and interruptions, the risk of damage to the reputation of brands promoted by the Company and the cost of store network expansion and retrofits, compliance costs associated with environmental laws and regulations, fluctuations in currency and exchange rates, commodity prices, the Company's ability to maintain good relations with its employees, changes in the law or regulations regarding the environment or other environmental liabilities, the Company's capital structure, funding strategy, cost management programs and share price, the Company's ability to integrate acquisitions and the Company's ability to protect its intellectual property.

For more information on these risks, uncertainties and other factors the reader should refer to the Company's filings with the securities regulatory authorities, including the Company's annual information form dated May 2, 2014 and management's discussion and analysis of financial condition and results of operations for the thirteen and fifty-two weeks ended January 31, 2015, which are available on SEDAR at www.sedar.com. Actual results may differ materially from what the Company currently expects. Other than as required under securities laws, the Company does not undertake to update any forward-looking information at any particular time. The reader should not place undue importance on forward-looking information and should not rely upon this information as of any other date. All forward-looking information contained in this press release is expressly qualified in its entirety by this cautionary statement.

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