Ortelius Files Lawsuit Against Hudson’s Bay Company and Richard Baker Over Proposed Privatization Transaction

Statement of Claim Highlights the Oppressive Actions and Conduct of Mr. Baker While Serving as HBC’s Governor and Executive Chairman

NEW YORK--()--Ortelius Advisors, L.P. (together with its affiliates, "Ortelius" or “we”) announced today that it has filed a lawsuit in the Ontario Superior Court of Justice against Hudson’s Bay Company (TSX: HBC) (“Hudson’s Bay,” “HBC” or the "Company”), Richard A. Baker and Rupert Acquisition LLC. The legal action comes in response to what Ortelius views as a concerted effort to disenfranchise non-insider shareholders and oppress the value of HBC’s shares.

Peter DeSorcy, Managing Member of Ortelius Advisors, L.P., commented: “Richard Baker’s duties as Governor and Executive Chairman of Hudson’s Bay Company were inexorably compromised once he sought to buy the Company in the spring of 2017. His interests were no longer aligned with minority investors in maximizing shareholder value, but in minimizing the purchase price for the continuing shareholders. Many of these actions are detailed in our statement of claim.”

Ortelius believes that Mr. Baker acted in an oppressive and prejudicial manner by purposefully coupling transactions that he knew would create a ceiling for the share price and manufacturing a consortium bidding group years in advance of the timing of his issuer insider bid. He knew that the existence of this consortium would discourage competing bids from arising, handcuff any special committee by effectively preventing it from being capable of ever accepting any superior proposal, and guarantee that no competing bid could ever proceed.

Ortelius also contends that the circular prepared by HBC contains a number of misrepresentations and omissions. With respect to the Saks Fifth Avenue flagship property, the circular presents a value of CAD$2.16 billion. HBC, and indeed Baker, represented in numerous public statements that the Saks flagship property had an appraised value of between CAD$4.1-$4.6 billion. Inappropriate assumptions resulted in a significant underappraisal of the true value of this iconic property. Beyond the plain erroneous valuation, shareholders have a right to understand why the value of the Company’s most valuable asset has declined by more than 50%. This information, however, was not contained in the circular. This, and various other misrepresentations in the circular, which are detailed in the lawsuit, prevent shareholders from making an informed decision about Mr. Baker’s issuer insider bid.

DeSorcy further added: “One of the most egregious examples of Mr. Baker’s disenfranchisement of shareholders occurred in June of this year. The stock should have doubled upon the announcement on the tenth of the month of the monetization of the company’s European business for CAD$1.5 billion. The Executive Chairman’s ‘take-over’ bid, announced five minutes later pre-market, restricted the gain to just 40% and was unequivocally tantamount to a ‘take-under.’ His offer to privatize Hudson’s Bay at an alleged ‘substantial premium’ was fundamentally a ’substantial discount.’”

About Ortelius Advisors, L.P.

Ortelius is a research-intensive, fundamental-based, activist-oriented alternative investment management firm focused on event-driven opportunities. Founded in 2015 by Peter DeSorcy and H.R.H. Prince Pavlos, the asset manager is based in New York City.

Contacts

For Media:

Profile
Greg Marose / Charlotte Kiaie, 347-343-2999
gmarose@profileadvisors.com / ckiaie@profileadvisors.com

Contacts

For Media:

Profile
Greg Marose / Charlotte Kiaie, 347-343-2999
gmarose@profileadvisors.com / ckiaie@profileadvisors.com