Shareholders Collectively Owning 57% of Hudson’s Bay Company’s Outstanding Common Shares Outline Significant Risks of Catalyst Capital’s Coercive Partial Bid

Urge Special Committee to Preserve Integrity of its Review Process

Reiterate Substantial Cash Premium Proposal for All HBC Shares

NEW YORK--()--The group of shareholders of Hudson’s Bay Company (TSX: HBC) (“HBC” or the “Company”), who collectively own approximately 57% of the outstanding common shares of HBC on an as-converted basis, which includes individuals and entities related to, or affiliated with, Richard A. Baker, Governor and Executive Chairman of HBC; Rhône Capital L.L.C.; WeWork Property Advisors; Hanover Investments (Luxembourg) S.A.; and Abrams Capital Management, L.P. (collectively the “Continuing Shareholders”), today delivered the following letter to the Special Committee of the Board of Directors of HBC:

August 1, 2019

The Special Committee of the Board of Directors Hudson’s Bay Company
401 Bay Street, Suite 500
Toronto, ON M5H 2Y4

Dear Special Committee Members:

As the Special Committee continues its review and evaluation of our privatization proposal, we wanted to take this opportunity to emphasize a number of points.

HBC is currently facing difficult challenges. Its strategic plan requires significant capital investment and is subject to a number of risks and uncertainties. The current macro environment for retailers poses serious threats to both our operating business and our related real estate assets. We believe that the business plan and value creation initiatives required to address these challenges will be better understood, accepted and executed by patient capital in a private company context.

We are already large and long-term shareholders of HBC, and are prepared to transfer the long-term risks and uncertainties inherent in pursuing the Company’s strategic plan from HBC shareholders to the Continuing Shareholders via our whole company cash premium proposal. Our proposal provides an opportunity for all minority shareholders to realize the sale of 100% of their shares in a fair process and at a premium cash price, with the benefit of full disclosure and an informed Board recommendation following a careful and thorough review.

Catalyst Capital’s (“Catalyst”) coercive partial bid for approximately 14.8 million shares (or, only 15% of HBC’s outstanding common shares not owned by the Continuing Shareholders), which expires before the Special Committee is expected to complete its work, is designed solely to prevent our whole company transaction from occurring, and thereby deprive minority shareholders of the ability to receive a substantial cash premium for their full investment in HBC. If successful in its partial bid, Catalyst has stated that it intends to vote its shares (including any that are tendered in its partial bid) against our privatization proposal. This could effectively block a whole company sale transaction that the Special Committee chooses to make available to all HBC minority shareholders on the basis that it is in their best interests.

It is also important to recognize that, absent a whole company transaction such as the one we are proposing, there is a real and significant risk that HBC’s stock price falls back to levels comparable to where the stock was trading prior to the announcement of our privatization proposal. We strongly urge the Special Committee to take whatever measures necessary to preserve the integrity of its review process and not allow Catalyst (or any other party) to usurp its role.

To be clear, we, the Continuing Shareholders, are committed to our long-term investment in HBC, and to pursuing the Company’s current strategic plan – whether as a private company or while continuing as a public company. We will continue to be respectful of the Special Committee’s review process and look forward to engaging in substantive discussions with the Special Committee to deliver significant cash premium value to HBC minority shareholders for the entirety of their investment.

Very truly yours,

Richard A. Baker

Forward-Looking Statements

Certain statements made in this news release are forward-looking statements within the meaning of applicable securities laws, including, but not limited to, statements with respect to: the take-private proposal, including future discussions with the Company’s Board of Directors, Special Committee and their advisors regarding the take-private proposal; the risk and challenges facing the Company; and other statements that are not material facts. Often but not always, forward-looking statements can be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “believe”, “estimate”, “plan”, “could”, “should”, “would”, “outlook”, “forecast”, “anticipate”, “foresee”, “continue” or the negative of these terms or variations of them or similar terminology.

Although the Continuing Shareholders believe that the forward-looking statements in this news release are based on information and assumptions that are current, reasonable and complete, these statements are by their nature subject to a number of factors that could cause actual results to differ materially from their expectations and plans as set forth in such forward-looking statements, including, without limitation, the following factors, many of which are beyond the Continuing Shareholders’ control and the effects of which can be difficult to predict: (a) the possibility that the Company, its Board of Directors, its Special Committee and the Continuing Shareholders cannot come to an agreement on the take-private proposal or will not proceed with giving shareholders an opportunity to accept or vote in favour of the take-private proposal; (b) the possibility that the terms and conditions of the take-private proposal will differ from those that are currently contemplated; (c) the failure to obtain or satisfy, in a timely manner or otherwise, required shareholder and regulatory approvals and other conditions of closing necessary to complete the take-private proposal; (d) the risks and challenges facing the Company, including those set forth in the "Risk Factors" section of the Company’s Annual Information Form dated May 3, 2019 as well as the Company’s other public filings, available at and at; and (e) other risks and/or factors beyond its control which could have a material adverse effect on the Company or the ability to consummate the take-private proposal.

The forward-looking statements contained in this news release describe the Continuing Shareholders’ expectations at the date of this news release and, accordingly, are subject to change after such date. Except as may be required by applicable Canadian securities laws, the Continuing Shareholders do not undertake any obligation to update or revise any forward-looking statements contained in this news release, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on these forward-looking statements.


Matthew Sherman / Kelly Sullivan / Annabelle Rinehart / Jill Kary
Joele Frank, Wilkinson Brimmer Katcher, (212) 355-4449


Matthew Sherman / Kelly Sullivan / Annabelle Rinehart / Jill Kary
Joele Frank, Wilkinson Brimmer Katcher, (212) 355-4449