- Reinforces that its $11 per share offer is superior in value and treatment of all shareholders
- Catalyst is committed to engaging in negotiations once the flawed and undervalued Baker led Insider Issuer Bid is rejected by shareholders
- Calls on the HBC Board to provide adequate disclosure and to conduct a true strategic alternative process to maximize value for the benefit of all shareholders
- Catalyst will continue to oppose the Insider Issuer Bid and urges shareholders to vote AGAINST it utilizing the HBC proxy
TORONTO, Dec. 3, 2019 /CNW/ - The Catalyst Capital Group Inc., on behalf of investment funds managed by it, ("Catalyst") today provided an update on its offer to acquire all of the issued and outstanding shares of Hudson's Bay Company (TSX: HBC) ("HBC" or the "Company") for cash consideration of $11.00 per common share (a "Common Share"). Catalyst also commented on recent statements by the Special Committee of the Board (the "Special Committee") and by insiders led by Mr. Richard Baker (the "Baker Group").
Catalyst disclosed its independently financed, all-cash transaction on November 27, 2019, as a superior offer in both financial terms and structure to the Company-sponsored share buyback (the "Insider Issuer Bid") outlined in the October 20, 2019 arrangement agreement (the "Baker Group Agreement") between insiders led by Mr. Richard Baker (the "Baker Group") and the Company. The Special Committee is in receipt of financing support letters from leading US and international financial institutions and has not questioned our ability to finance our all-cash transaction. The financing structure provides for sufficient excess liquidity so as to ensure the success of the Company in the long-term.
The Special Committee did not argue the superiority of the Catalyst offer nor did it address the many issues that Catalyst has raised in regard to the process leading up to the Insider Issuer Bid. It only notes that the Baker Group is blocking any ability of the Board to maximize value for all shareholders. It is also interesting to note that the Baker Group offer continues to have a financing condition with respect to the availability of a $150 million loan, notwithstanding that they are using shareholder money to take the Company private.
Catalyst has also filed a notice of application for a hearing with the Ontario Securities Commission seeking redress for inadequate and inaccurate disclosure, and coercive and unfair practices leading up to and following the HBC Board approval of the Insider Issuer Bid.
Gabriel de Alba, Managing Director and Partner of Catalyst, said, "First and foremost, the actions by the HBC Special Committee, whether intentional or not, are attempting to facilitate the transfer of value from a minority group of shareholders directly to the majority. If the Baker Group will not accept $11.00 per share because they want to reap the rewards of future value creation, why should minority shareholders be coerced to accept $10.30 in a deal that uses their own capital and has significant negative tax consequences for certain shareholders? Second, we are disappointed – but not surprised – by the recommendation of the Special Committee of HBC. From the beginning, Richard Baker rigged the process to constrain the Special Committee from doing its duty and ensuring that all shareholders are treated equally and that shareholders have the opportunity to receive maximum value for their shares. Beyond holding the Board hostage, Mr. Baker is also employing baseless fear-mongering to try and scare shareholders into supporting his coercive transaction."
Added de Alba, "Catalyst's $11.00 offer will continue to stand after shareholders reject the Baker Insider Issuer Bid. Our offer is bona fide and supported by leading US and international financial institutions, the details of which are well known to the HBC Special Committee. We are prepared to support this iconic company over the long-term. We are also supportive of the Board taking action to run a full and open process to maximize value to ensure that shareholders have the opportunity to support a transaction that benefits everyone, not just the insider group. If Richard Baker does not want to sell his shares, then we invite him, the insiders and any other shareholder to participate in our superior offer for HBC. Until such time as the Board engages on our offer, runs a fair and open process to maximize value and the Baker insiders are released from their voting agreement, Catalyst will reject any coercive offer and urges other shareholders to do the same."
We urge fellow shareholders to vote AGAINST the Insider Issuer Bid utilizing the proxy mailed to you by HBC
We urge shareholders to VOTE AGAINST the Insider Issuer Bid and all related proposals to be voted upon at the HBC shareholders' meeting currently scheduled for December 17, 2019 (the "Meeting"). Your vote matters.
We thank shareholders for their strong support to date. The rejection of the Insider Issuer Bid is a key step for the maximization of shareholder value. Notwithstanding the threats of Mr. Richard Baker and the Company regarding declining share prices if we reject their proposal, we can act together to enhance shareholder value.
IF YOU HAVE ALREADY VOTED ON THE PROXY CARD SENT TO YOU BY HBC AND WANT TO CHANGE YOUR VOTE, YOU CAN STILL DO SO BY SIMPLY RECASTING YOUR VOTE AGAINST. ONLY YOUR LATEST DATED PROXY CARD WILL COUNT.
If you have any questions, or need help executing your vote, contact Laurel Hill Advisory Group at: 1-877-452-7184 or 1-416-304-0211 or email [email protected]. There is a team standing by to assist you.
Catalyst is relying on the exemption under section 9.2(4) of National Instrument 51‐102 ‐ Continuous Disclosure Obligations to make this public broadcast solicitation. The following information is provided in accordance with corporate and securities laws applicable to public broadcast solicitations.
This solicitation is being made by Catalyst, and not by or on behalf of the management of HBC. Laurel Hill Advisory Group will receive a fee of $50,000 for its services as Information Agent plus ancillary payments and disbursements. Based upon publicly available information, HBC's registered office is at 401 Bay Street, Suite 500, Toronto, Ontario, Canada M5H 2Y4 and its head office is at 8925 Torbram Road, Brampton, Ontario, Canada L6T 4G1. Catalyst is soliciting proxies in reliance upon the public broadcast exemption to the solicitation requirements under applicable Canadian corporate and securities laws, conveyed by way of public broadcast, including press release, speech or publication, and by any other manner permitted under applicable Canadian laws. In addition, this solicitation may be made by mail, telephone, facsimile, email or other electronic means as well as by newspaper or other media advertising and in person. All costs incurred for the solicitation will be borne by Catalyst.
A registered shareholder who has given a proxy may revoke the proxy before it has been exercised by: (i) completing a proxy form that is dated later than the proxy form being revoked and mailing or faxing it to TSX Trust Company so that it is received before 10:00 a.m. (Toronto time) on December 13, 2019 or, if the Meeting is adjourned or postponed, 48 hours prior to the time of the Meeting (excluding Saturdays, Sundays and holidays); (ii) sending a revocation notice in writing to the Corporate Secretary of the Company at its registered office so that it is received at any time up to and including the last business day before the date of the Meeting (the notice can be from the shareholder or the authorized attorney of such shareholder); (iii) making a request in writing to the chair of the Meeting that its proxy be revoked; or (iv) any other manner permitted by law. A non‐registered shareholder may revoke a form of proxy or voting instruction form given to an intermediary at any time by written notice to the intermediary in accordance with the instructions given to the non-registered shareholder by its intermediary. Non-registered shareholders should contact their broker for assistance in ensuring that forms of proxies or voting instructions previously given to an intermediary are properly revoked. None of Catalyst and its directors and officers, or, to the knowledge of Catalyst, any associates or affiliates of the foregoing, has any material interest, direct or indirect, in any transaction since the commencement of HBC's most recently completed financial year, or in any proposed transaction which has materially affected or will materially affect HBC or any of its subsidiaries, other than as set out herein. None of Catalyst or, to its knowledge, any of its associates or affiliates, has any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter to be acted upon at any upcoming shareholders' meeting, other than as set out herein.
Shareholders with questions or who need assistance with their proxies can contact the Information Agent:
Laurel Hill Advisory Group
North America Toll Free: 1-877-452-7184
Collect Calls outside North America: 1-416-304-0211
Email: [email protected]
Certain statements contained in this press release, including statements regarding completion of the Catalyst transaction and the structure and financing thereof and the Catalyst offer continuing to stand after shareholders reject the Insider Issuer Bid, contain "forward-looking statements" and are prospective in nature. Forward-looking statements are not based on historical facts, but rather on current expectations and projections about future events, and are therefore subject to risks and uncertainties that could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as "plans", "expects", "intends", "anticipates", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Although Catalyst believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed on such statements. Material factors or assumptions that were applied in formulating the forward-looking information contained herein include the assumption that Catalyst will be able to secure the necessary financing to complete its proposed transaction, satisfaction of due diligence, that shareholders who currently oppose the Insider Issuer Bid will continue to do so, the business and economic conditions affecting HBC's operations will continue substantially in the current state, including, without limitation, with respect to industry conditions, general levels of economic activity, continuity and availability of personnel and third party service providers, local and international laws and regulations, foreign currency exchange rates and interest rates, inflation, and taxes, and that there will be no unplanned material changes to HBC's facilities, operations and customer and employee relations. Catalyst cautions that the foregoing list of material factors and assumptions is not exhaustive. Many of these assumptions are based on factors and events that are not within the control of Catalyst and there is no assurance that they will prove correct. Important factors that could cause actual results, performance or achievements to differ materially from those expressed or implied by such forward-looking statements include, among other things, actions taken by HBC or the Baker Group with respect to Catalyst's offer, the Insider Issuer Bid and agreements entered into among HBC and the Baker Group, Catalyst's ability to secure the necessary financing to complete the Catalyst transaction, industry risk and other risks inherent in the running of the business of HBC, foreign currency exchange rates and interest rates, general economic conditions, legislative or regulatory changes, changes in income tax laws, and changes in capital or securities markets. These are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in any of Catalyst's forward-looking statements. Other unknown and unpredictable factors could also impact its results. Many of these risks and uncertainties relate to factors beyond Catalyst's ability to control or estimate precisely. Consequently, there can be no assurance that the actual results or developments anticipated by Catalyst will be realized or, even if substantially realized, that they will have the expected consequences for, or effects on, Catalyst or HBC and their respective future results and performance. Forward-looking statements in this press release are based on Catalyst's beliefs and opinions at the time the statements are made, and there should be no expectation that these forward-looking statements will be updated or supplemented as a result of new information, estimates or opinions, future events or results or otherwise, and Catalyst disavows and disclaims any obligation to do so, except as required by applicable law.
SOURCE The Catalyst Capital Group Inc.
For further information: Media Inquiries: Dan Gagnier / Jeffrey Mathews, Gagnier Communications, Phone: 1-646-569-5897, Email : [email protected]