Hudson's Bay to launch $3.6 billion credit facility on Tuesday

By Sara Rosenberg

New York, Sept. 23 - Hudson's Bay Co. scheduled a bank meeting for Tuesday to launch its proposed roughly $3.6 billion credit facility, according to a market source.

Bank of America Merrill Lynch and RBC Capital Markets are the lead banks on the deal.

The facility consists of a $1.9 billion senior secured term loan B (B1/BB), a C$750 million ABL revolver and a $950 million ABL revolver.

Proceeds will be used to help fund the acquisition of Saks Inc. for $16.00 per share in an all-cash transaction valued at about $2.9 billion, including debt, and to refinance some existing debt.

Other funds for the transaction will come from $400 million in senior unsecured notes, from $1 billion of equity, including $500 million from Ontario Teachers' Pension Plan and $250 million from West Face Capital Inc., and cash on hand.

About $357 million will be drawn under the new revolvers for the acquisition.

Closing is expected by year-end, subject to approval by Saks shareholders, regulatory approvals and other customary conditions.

The combined company would have generated in fiscal 2012 pro forma sales of about C$7.2 billion and normalized EBITDA of around C$587 million, before any synergies.

Leverage will be around 5.7 times, but the company plans on bringing that down to 2.5 times within four to five years.

Hudson's Bay is an Ontario-based operator of department stores. Saks is a New York-based retailer of clothes and accessories for men, women, children and the home.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.