The latest offer from Baker’s Group to take HBC private has been deemed fair for shareholders through a formal valuation from TD securities.

A special committee of Hudson Bay’s board is reaffirming its endorsement of a buyout of shares to take the company private after receiving an updated valuation, one of the conditions of a deal that was announced earlier this month.

On Jan. 3, the company that owns the chain of department stores announced a group headed by executive chairman Richard Baker raised its going-private offer to $11 per share, satisfying Catalyst Capital Group, its leading rival shareholder which controls about 17.5% of the company’s common shares. Catalyst said that one condition was that TD Securities Inc. provide a new formal valuation of Hudson’s Bay Co. prior to a vote and that “the lower end of the range of the fair market value of the HBC Shares is equal to or less than $11.”

In a news release on January 27, HBC said the updated valuation determined that, as of that day, the fair market value of the common shares of HBC ranged between $9.75 and $12 per common share. The release says that TD Securities determined that the payment to the common shareholders of HBC “is fair, from a financial point of view, to such shareholders.”

A vote on the transaction will be held at special meeting of shareholders on February 27, and to pass it will need at least 75% of the votes cast by all shareholders and at least a simple majority of votes by minority shareholders, including Catalyst.

Source: The Toronto Star