U.S. investor bids for Hudson's Bay Co.

CBC || October 29, 2005

Update - Jan 27 2006 - Hudson's Bay agrees to be acquired by U.S. investor Zucker

Shares of Hudson's Bay Co. soared more than 20 per cent Friday after South Carolina businessman Jerry Zucker announced a billion-dollar takeover offer for Canada's oldest company.

Maple Leaf Heritage Investments Acquisition Corp., a Zucker subsidiary, is offering $14.75 in cash for each share of Hudson's Bay. Maple Leaf Heritage has lined up $1 billion in financing from two American banks, it said.

HBC shares closed at $15.35 Friday, up $2.72 from Thursday's close and above the takeover offer price – a sign that investors anticipate either an improved offer from Zucker or another bid.

The bid represents a 17 per cent premium on Thursday's closing price for HBC (TSX:HBC) shares on the Toronto Stock Exchange.

Article Posted at www.KnowledgeDrivenRevolution.com

Hudson's Bay Company

Incorporated May 2, 1670 by royal charter from King Charles II as The Governor and Company of Adventurers of England Trading into Hudson's Bay.

It owned all the land in the Hudson's Bay watershed, an area more than one-third the size of Canada today. It had a monopoly on all trade there and concentrated on the fur trade.

It merged with rival North West Company in 1821, further expanding its territory to include northern Alberta and B.C., the Northwest Territories and the Yukon.

Its trade monopoly was abolished in 1870 and its land sold to the government of Canada.

The modern company runs three main retail divisions: the Bay, Zellers and Home Outfitters. It has 70,000 employees.

Zucker has been buying up shares of the Bay since mid-2003, amassing an 18.8 per cent stake in the chain.

"Upon the successful completion of the offers, Heritage intends to operate HBC in the normal course," Zucker's firm said in a release.

"Heritage remains generally supportive of HBC's five year plan but believes that there are a variety of other strategies that need to be implemented in order to enhance operational effectiveness and shareholder value," the company said.

HBC 'assessing the bid'

In a brief statement, Hudson's Bay said it was assessing the bid. "The Board will make a recommendation to shareholders and advise the market accordingly," it said.

Earlier this month, Hudson's Bay said it was considering "strategic alternatives" for its profitable credit card business. That could include its sale.

Retail market analyst Hermann Kircher said the Zucker bid was not unexpected. "He's signalled his intentions for a long period of time," he told CBC Business News.

Kircher said other parties could well be interested in making an offer for HBC. He said a big pension fund that owns major regional malls might make a bid.

Zucker is the self-made billionaire head of The InterTech Group Inc., a conglomerate that is the second-largest private firm in South Carolina. It has interests in the chemical, textile and technology fields. It has annual sales of about $3 billion US.

Forbes magazine estimates his personal worth at $1 billion US, making him the 346th wealthiest American.

InterTech purchased Montreal-based Dominion Textile in 1997. It also owns at 46-per cent stake in Circa Enterprise, a Calgary-based supplier of surge equipment for the telecom industry

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