NEW YORK ( The Deal) -- Hudson's Bay Co. said Monday it was taking the "for sale" sign off iconic department store chain Saks (SKS) for $16 per share or about $2.9 billion. There is a 40 day "go shop" period.
The deal will combine Saks with Canada's Hudson's Bay department store and the Lord & Taylor chain -- which NRDC Equity Partners bought in 2006 for $1.2 billion before it acquired Hudson's Bay in a company that generated pro forma sales and normalized EBITDA in fiscal 2012 of approximately C$7.2 billion ($7 billion) and C$587 million respectively.
Financing for the transaction is expected to come from $1 billion of new equity,$1.9 billion in senior secured loans, $400 million of senior unsecured notes and available cash. Ontario Teachers' Pension Plan and West Face Capital Inc. are putting $500 million and $250 million of equity funding, respectively, into the deal. Additional credit facilities are being provided by BofA Merrill Lynch (BAC) and Royal Bank of Canada (RY).
BofA Merrill Lynch acted as lead financial adviser to HBC, joined by RBC Capital Markets, while Stikeman Elliott and Willkie Farr & Gallagher provided legal counsel. Saks turned to Goldman Sachs (GS), Morgan Stanley (MS) and Guggenheim Securities acted for financial advice and Wachtell, Lipton, Rosen & Katz as legal counsel.
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