WeWork, shareholders bedevil plan to take HBC private

TORONTO — Executive Chairman Richard Baker’s plan to take Hudson’s Bay Co. off the trading markets has hit a snag as one of the company’s partners has had to withdraw its IPO. Office-sharing firm WeWork, which is among the combined-majority shareholders backing Baker’s $1 billion bid, announced this week it is focusing on its core business in an effort to stem its losses. In 2017, WeWork and Rhone Capital agreed to purchase the flagship Lord & Taylor store in New York, garnering a stake of unknown size in HBC.

Retail real estate consultant Alex Arifuzzaman told The Globe & Mail that WeWork’s struggles could affect HBC. “HBC is a landlord. If WeWork goes belly up, [HBC] retains the property. So they can re-lease it,” he said. “The question is, how much do they charge WeWork and does [WeWork] pay the market rate.” Meanwhile, the privatization bid faces opposition from activist shareholders including Catalyst Capital Group and private-equity firm Sandpiper Group. Sandpiper CEO Samir Manji has called for Baker’s resignation, expressing his view that Baker “wants to buy the company for $9.45 a share, because he knows he can unlock the value for himself and his friends”.