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Land & Buildings Urges Hudson's Bay To Evaluate All Strategic Alternatives

Land & Buildings Investment Management, LLC said it has issued a letter to the board of directors of Hudson's Bay Co. (HBC.TO), calling on the department store operator to evaluate all strategic alternatives to maximize shareholder value. Land & Buildings is a holder of about 4.3 percent of Hudson's Bay shares.

Land & Buildings said that a transaction of Hudson's Bay with a merger partner such as Neiman Marcus or Macy's would be challenging and complicated. The shareholder noted that Hudson Bay's stock has declined nearly 25 percent since the deal talks surfaced, and Hudson's Bay announcing last Thursday that it would be undertaking a massive $350 million restructuring to realign its own business "to get ahead of the changing retail landscape".

Land & Buildings added that unlike its peers, Hudson's Bay owns the vast majority of its real estate. While the company estimates the value of the real estate is worth C$35 per share, it could be worth 4 times the current share price of C$8.88.

Land & Buildings noted that NYC Saks Fifth Avenue location alone has been independently valued at about C$5 billion or C$16 a share.

The shareholder urged Hudson's Bay to evaluate all strategic options to maximize value for shareholders, including monetization or repurposing of real estate, as well as being taken private by management, given its more than 20 percent insider ownership.

by RTT Staff Writer

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