Rhône Capital completes $632M investment in HBC

Photo of author

By Ted Liu

Rhône Capital has completed previously announced US $500 million or CDN $632 million investment in Hudson’s Bay Company (TSX: HBC)

Rhône Capital through Fabric Luxembourg Holdings S.à r.l. acquired 50,919,608 Preferred Shares of HBC at US 9.82 or CDN $12.42 per share for an aggregate purchase price of approximately US $500 million or CDN $632 million.

In connection with the closing of the transaction, M. Steven Langman, Managing Director of Rhône, and Eric Gross, Managing Partner of WeWork Property Investors, have joined HBC board of directors.

HBC intends to use net proceeds to repay outstanding borrowings on its asset-based revolving facility, which will reduce interest expense and strengthen its balance sheet.

HBC also announced the receipt of a deposit in the amount of US $75 million or CDN $95 in connection with the previously announced sale of the Lord & Taylor Fifth Avenue building to an affiliate of WeWork Property Advisors in a transaction valued at US $850 million CDN $1.075 billion, subject to customary adjustments. The deposit is non-refundable subject to certain limited exceptions.
It is currently expected that the sale of the Lord & Taylor Fifth Avenue building will close no later than August 10, 2018, subject to the satisfaction of applicable conditions.

Stikeman Elliott LLP and Willkie Farr & Gallagher LLP acted as Canadian and U.S. legal counsel, respectively, to HBC. Gibson, Dunn & Crutcher LLP and McCarthy Tétrault LLP acted as U.S. and Canadian legal counsel, respectively, to WeWork Property Advisors and Rhône.

BofA Merrill Lynch and RBC Capital Markets served as financial advisors to HBC. Morgan Stanley served as financial advisor to WeWork Property Advisors and Rhône.

photo credit: Hudson’s Bay Company