1) Hudson’s Bay sale now using protocol designed to handle insider bid: document

Published April 11, 2025

Courtesy Barrie360.com and Canadian Press

By Tara Deschamps, April 11, 2025

A new document circulated to lawyers involved in Hudson’s Bay’s creditor protection case is raising suspicion that a company insider may be exploring a bid for the retailer’s assets or leases.

The “Insider Protocol” document sent to lawyers Thursday and obtained by The Canadian Press describes how processes meant to help the ailing retailer find investors or buyers will now include new provisions to ensure “integrity and fairness.”

It said the protocol is being enacted “in view of a potential insider bid that may involve certain members of management,” who are not named.

The protocol comes after company insiders, including members of the retailer’s leadership team, who are considering making a bid for assets or leases were required to declare their interest by this past Monday to the court-appointed organizations overseeing the sales processes.

No members of the Bay or its sister companies Saks Fifth Avenue and Saks Off 5th have so far publicized their interest in the business and the document says there are “no assurances” that a bid will eventually be made.

“Hudson’s Bay Company has no comment on the sale process at this time,” the retailer said in a statement. “To be clear, no Insider Bid has been identified or confirmed and these protocols are procedural protections that are common in any similar process.” 

Reflect Advisors, one of the companies managing the sales process, said Friday that these are procedural protections, typical in any process like this, though no insider bid has been received at this time.

The implementation of such a protocol is common in sales processes for companies that have sought creditor protection, but its emergence also increases the likelihood that someone involved in the management of the Bay or Saks is interested in investing in the businesses or buying their assets.

The 355-year-old company, which holds the title of Canada’s oldest business, put its assets and leases on the market after filing for creditor protection last month. It said it was seeking creditor protection because of subdued consumer spending, Canada-U.S. trade tensions and post-pandemic drops in downtown store traffic.

As part of that process, it is liquidating and closing 74 Bay stores, as well as 13 Saks Off 5th and two Saks Fifth Avenue locations in Canada that are owned by Hudson’s Bay through a licensing agreement. 

The new protocol guiding how the company offloads assets and leases dictates that insiders mulling a bid will provide Alvarez & Marsal, a third-party monitor appointed by the court to oversee Hudson’s Bay creditor protection case and sales, with a list of staff that could be linked to their offer “from time to time” and will “update such list as necessary.”

These staff must have permission from Alvarez & Marsal before having discussions with potential bidders. The monitor must also OK any talks between inside bidders, landlords and licensees of the Bay’s brands and intellectual property.

Hudson’s Bay management part of these discussions will not be given access to info about the sale or lease monetization that is not distributed to all other parties involved in the process.  The withheld information will include the identity of other possible bidders.

Binding bids for the company’s assets or investments in the business are due April 30, while those wanting the leases have to make an offer by May 1.

Once bids are made, they will be assessed by Hudson’s Bay, Alvarez & Marsal, Oberfeld Snowcap and Reflect Advisors. If several parties come forward, they may choose to auction off assets.

Any sales must be approved by the Ontario Superior Court. In the overall asset sales process, its approval must be sought by May 30. Leases that are not bid on or terminated must be disclaimed by July 15.

2)Deadline nearing for Hudson’s Bay insiders to declare interest in assets

Courtesy Barrie360.com and Canadian Press

By Tara Deschamps, April 6, 2025

Hudson’s Bay insiders, including its head honcho Richard Baker, have until the end of Monday to declare whether they’re interested in making a bid for any of the ailing company’s assets or leases.

Twin processes underway to uncover interest in the company’s physical and intellectual property force the department store’s parent company, its subsidiaries and its leaders to reveal whether they’re eyeing an investment in the business or a purchase of its remaining treasures.

Everything from leases to the rights to the company’s famed Stripes brand and even its art collection may be up for grabs, though the company nor its court filings have detailed precisely what’s on the table. 

Hudson’s Bay declined to comment on whether it or its affiliates, including executive chairman Baker, will seek any of the assets. 

If they plan to make an offer for leases, Alvarez & Marsal, a third-party appointed by the court to guide Hudson’s Bay through creditor protection, and real estate broker Oberfeld Snowcap Inc. must both be alerted. Neither replied to a request for comment asking whether they’d received word of a bid. 

If the insiders want other assets, Alvarez & Marsal and Reflect Advisors, Hudson’s Bay’s financial advisor, must be told. Adam Zalev, Reflect’s managing director, said in an email, “at this time it is not appropriate for us to provide comments to the media.”

In general, insiders at companies under creditor protection make bids for assets because they can get the property “at a heavy, heavy discount,” said Insolvency Insider newsletter editor Dina Kovacevic.

“It’s a way to buy the assets for less than they would be worth were they not being sold as part of an insolvency process and especially to absolve the company of its liabilities,” she said.

Any bid from Baker, who once told media he plans to run the company until he dies, could extend his reign, which began when his National Realty and Development Corp. Equity Partners bought Hudson’s Bay in 2008 from the widow of late South Carolina businessman Jerry Zucker for $1.1 billion.

Some experts like Joanne McNeish, an associate professor at Toronto Metropolitan University specializing in marketing, have characterized Baker’s Hudson’s Bay acquisition as “the point at which the company began its slow death.”

“Investment firms are like house flippers … A house flipper rarely deals with the underlying business issues,” she said in an email in mid-March.

Under Baker, the company went public in 2012 and then private through a takeover bid that had to be boosted twice to earn shareholder approval in the weeks before Canada was hit with COVID-19 pandemic lockdowns.

Shareholders were difficult to appease in part because Baker presided over HBC while its stock was dropping — but many thought the company could use its vast real estate to turn things around. 

Baker sold off much of the real estate and last summer, purchased rival Neiman Marcus and its Bergdorf Goodman for US$2.65 billion. He combined the luxury department stores with the Saks Fifth Avenue and Saks Off 5th chains he already owned in a new entity called Saks Global, effectively setting the stage for Hudson’s Bay’s creditor protection case.

Liza Amlani, Retail Strategy Group co-founder, reasons the assets Hudson’s Bay has to offer would be attractive to a vast array of investors and businesses because they still carry a lot of value and may come at reduced prices because of the company’s distressed state.

“The intellectual property and loyal customer following could be a cash cow for a new buyer if they strategically invest in these assets,” she said in an email, naming leases, the stripes, housewares brand Gluckstein and discount banner Zellers as potential purchases.

While the clock is ticking for Bay affiliates to declare their interest in obtaining assets, companies and individuals not linked to the beleaguered department store have more time.

Hudson’s Bay and its affiliates have to express their interest in making investments or bids well before others to ensure the sales processes are fair and don’t favour insiders. 

Until these parties declare they won’t make a bid, the court ordered Alvarez & Marsal, Oberfeld Snowcap and Reflect Advisors to “limit the sharing of information” with them “to ensure and preserve the fairness” of the sales processes.

Once outsiders wanting to buy Hudson’s Bay assets declare an interest, they will be asked to sign non-disclosure agreements to get access to financial information helping them assess whether they want to advance a deal.

Landlords can often bid on leases through such processes to regain complete control over who fills their vacant spaces, Kovacevic said.

Anyone internal or external interested has until April 30 to make a binding bid for Bay assets. Binding bids for leases are due May 1. These bids must be accompanied by a refundable deposit of 10 per cent of the purchase price.

Hudson’s Bay, Alvarez & Marsal, Oberfeld Snowcap and Reflect Advisors will assess the bids and decide which is most attractive to take and may choose to auction off assets if several parties have come forward. 

The court must approve any sales. In the overall asset sales process, its approval must be sought by May 30. Leases that are not bid on or terminated must be disclaimed by July 15.