Real estate disagreements at heart of HBC’s dilemma

BRAMPTON, Ont. — Executive Chairman Richard Baker’s bid to take Hudson’s Bay Co. private will turn on whether an independent assessment finds the company more valuable as a retailer or a property owner, governance experts have told Reuters. Much of the company’s value is tied up in its real estate holdings: selling some of those assets could raise more cash than Baker’s offer but would relegate stores to being tenants.

The offer exceeds HBC’s trading value at the time it was announced, but some shareholders put the company’s real value higher. The disparity comes down to how much property HBC can offload while remaining a viable retail operation. “There is judgment to be exercised on the valuation, which can always be challenging,” said Catherine McCall, executive director of the Canadian Coalition for Good Governance, which represents institutional shareholders.