Representatives for Baker and the investors backing his bid and the special committee of the company did not immediately respond for comment. "It is incredulous that the special committee could reasonably determine that near simultaneous announcements would maximize shareholder value for minority investors." Baker knew that coupling these transactions would impose an artificial ceiling on the stock price," said Peter DeSorcy, Ortelius' managing member. The move helped make Baker's offer look better, according to a statement from Ortelius. Ortelius said that the special committee's decision to make near-simultaneous announcements of a real estate deal and Baker's take-private earlier this year hurt the company's share price. Catalyst owns roughly 17.5% of Hudson's Bay, and Ortelius, which sued Hudson's Bay last week for oppressing its share price, holds roughly 0.5% of the company's stock. The take-private must win support from a majority of the minority shareholders. 17.Ī Hudson's Bay special board committee that negotiated the sale to Baker's consortium rejected a separate C$2.03 billion offer for the company from Catalyst Capital Group Inc last week on the basis that the consortium made it clear that it would not support a sale to another party. “It’s gotten a bit lost that HBC was not put up for sale.Ortelius joins a number of investors who say the sale of the company to its Executive Chairman Richard Baker and a group of Hudson's Bay shareholders with total voting control of 57% over the retailer is not generous enough.Ĭanadian buyout firm Catalyst Capital Group Inc and hedge fund Land & Buildings have said they oppose the deal, which will go up for a vote by minority shareholders on Dec. In an interview this week, David Leith, the HBC board member who chaired the special committee that ultimately recommended the Baker group bid, called its statement that it would not sell its shares “a gating issue” that Catalyst understood. Baker’s group continued its campaign Friday, releasing a presentation that said if HBC stockholders vote no, they are choosing “to remain minority shareholders in a public company with considerable risk, uncertainty, low liquidity and high volatility.” Ortelius argues the special committee can’t fulfill its role of protecting the interests of minority shareholders because the Baker group’s stance that it will not sell its stake “ensures that only their proposal can ever be considered. On Monday, the committee rejected Catalyst’s own $11-a-share proposal, saying it could not proceed because the Baker group would not sell. The bid has the blessing of the HBC board’s special committee. Baker’s group, which owns 57 per cent of the company, is offering $10.30 a share in cash. “His interests were no longer aligned with minority investors in maximizing shareholder value but in minimizing the purchase price for the continuing shareholders.” Baker was “inexorably compromised” once he sought to buy the company in the spring of 2017, his first attempt at a privatization. Peter DeSorcy, managing member of Ortelius, said in a news release that Mr. The company and the Baker group were unable to comment on the lawsuit Friday afternoon. But now, Ortelius says, HBC is understating the true value of the property and presenting “misleading negative views” of the company’s prospects. Baker’s repeated representations that HBC’s real estate was worth more than its stock price. In the lawsuit, Ortelius says it invested based on Mr. The firm, which includes Pavlos, Crown Prince of Greece, as a partner, says it’s an activist hedge fund that looks for companies whose “sum-of-the-parts is worth significantly more than the current market price.” Ortelius says it owns 876,450 shares of HBC, or about 0.5 per cent of the company, acquired in transactions starting in 2017.
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