Hudson’s Bay Co. Sold
By George Anderson
American Jerry Zucker made Canada’s oldest company an offer its board could not refuse.
Hudson’s Bay Co. announced yesterday it has accepted an offer by Mr. Zucker’s Maple Leaf Heritage Investments Acquisition Corporation to buy the company in an all-cash deal pegged at roughly $1.5 billion.
Mr. Zucker said in a released statement: “As the company’s largest shareholder for more than two years, we are aware of the tremendous opportunities available to Hbc. We look forward to working with management and associates to build upon the company’s strong position and dynamic growth opportunities. We are committed to enhancing our customers’ shopping experience through a substantially greater focus on service and revitalizing the spirit of the organization. Through the implementation of more efficient methods, we will positively differentiate Hbc from its competitors.”
Hudson’s Bay Co. president and CEO George Heller said, “We are anxious to get to work with Mr. Zucker on realizing the value that we know is inherent in this great company.”
Hudson’s Bay, which operates more than 500 stores under the Bay and Zellers banners, got its start at fur trading company back in 1670. Some have expressed concern that the chain would lose its Canadian character with an American as the owner.
Robert Johnston, vice president of strategy at Maple Leaf Heritage Investments and a Canadian citizen, told CBC News, “This company has been a Canadian icon into its fourth century now. Having a foreign owner of this company will no way change or diminish that.”
While many expect store closings to come, Mr. Johnston said, Maple Leaf has no concrete plans in that regard.
“We will take this one day at a time with a meaningful focus on rebuilding the brand, the image and the performance of each and every individual store,” he said.
Mr. Johnston said that the deal will put Hudson’s Bay in a position to compete with the likes of Wal-Mart in the future.
“The issue of Wal-Mart is difficult for retailers globally, but clearly by not being a public company in the future, HBC won’t need to make decisions which are based on making the quarter. Now we’ll be able to focus on the medium and the long term,” he said.
Wendy Evans, president of the retail consultancy Evans & Co., said consumers probably will not see any immediate changes but, down the road, divisions of the company may be spun off or sold.
Moderator’s Comment: Will being owned by an American mean Hudson’s Bay Co. will lose its Canadian character? What does the company need to do to improve
its competitive position?
Robert Johnston pointed out to CBC News that this is not the first time that Hudson’s Bay has been under foreign ownership.
“You have to recognize that this company was owned by foreigners up until three decades ago. It was, in fact, headquartered in the United Kingdom,” he said.
George Anderson – Moderator
- Hbc Reaches Agreement with Maple Leaf Heritage Investments Acquisition Corporation
– Hudson’s Bay Company
- Hudson’s Bay Co. accepts higher takeover offer from U.S. businessman Zucker – CBC News