Hudson’s Bay Co. (0617859D), Canada’s oldest company, will sell shares for C$18.50 to C$21.50 each in its C$400 million ($401 million) initial public offering, according to sale documents.
The 342-year-old retailer, which owns the U.S. fashion store chain Lord & Taylor and The Bay department stores, plans to sell 18.6 million to 21.6 million shares in the sale, according to the documents. The Toronto-based company is selling as much as a 19 percent stake through the IPO, valuing the retailer at about C$2.4 billion.
Hudson’s Bay, which was founded in 1670 as a fur-trading venture, is selling shares as retail competition is set to intensify in Canada. Minneapolis-based Target Corp. (TGT:US), the second- biggest U.S. retailer, will open 125 to 135 stores in the country next year, and Seattle-based Nordstrom Inc. (JWN:US) plans to open the first of what may be nine locations in 2014.
Hudson’s Bay will pay an annual dividend of 37.5 cents a share and will trade on the Toronto Stock Exchange under the symbol HBC. Spokeswoman Stephanie Thornbury declined to comment on the terms.
Hudson’s Bay was publicly traded in Canada until U.S. investor Jerry Zucker took the chain private in 2006 for C$860 million after fighting for control for more than a year.
In 2008, NRDC Equity Partners LLC, owner of the Lord & Taylor and Fortunoff chains, agreed to acquire Hudson’s Bay, investing $500 million in new equity. NRDC Chief Executive Officer Richard Baker became CEO of Hudson’s Bay. In 2008 Baker hired Bonnie Brooks as president and put her in charge of The Bay.
Hudson’s Bay had C$3.9 billion of sales for the year ended in January, according to the documents. That included C$2.2 billion of sales from 90 stores under the Hudson’s Bay name, C$1.4 billion from the 48 Lord & Taylor stores and C$300 million from Canada’s Home Outfitters chain.
The sale is being led by Royal Bank of Canada, Bank of Montreal (BMO), Canadian Imperial Bank of Commerce and Bank of America Merrill Lynch. The banks have the option to sell another 15 percent of the offering after the close of the transaction on Nov. 26, lifting proceeds to about C$460 million.
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