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Catalyst Presents Superior Offer to Acquire Hudson’s Bay Company for $11 per Common Share in Cash

November 27, 2019 GMT
  • Offer is superior in value and treatment of all shareholders, including minority shareholders

  • Unlike the Insider Issuer Bid, the Catalyst offer is a bona fide, independently financed all-cash offer that can be completed in a timely manner

  • Catalyst will allow other shareholders to participate as equity sponsors and is supportive of other approaches to obtain higher value for shareholders

  • Coercive and opportunistic Insider Issuer Bid results directly from a non-arm’s length process, whereby insiders attempted to preclude alternative bidders

  • Catalyst has filed a complaint with the Ontario Securities Commission regarding conduct by the Baker Group and HBC noting their actions are contrary to the public interest, including misrepresentations in circular and other potential securities law violations and a deeply flawed process by which the Company accepted Baker Group offer

  • Catalyst will continue to oppose the Insider Issuer Bid and calls on the HBC Board to conduct a true strategic alternative process to maximize value for the benefit of all shareholders

  • Shareholders urged to vote AGAINST the Insider Issuer Bid utilizing the HBC proxy

TORONTO, Nov. 27, 2019 /PRNewswire/ - The Catalyst Capital Group Inc., on behalf of investment funds managed by it, (“Catalyst”) today announced that it has offered to acquire all of the issued and outstanding shares of Hudson’s Bay Company (TSX: HBC) (“HBC” or the “Company”) for cash consideration of $11.00 per common share (a “Common Share”).

Catalyst currently exercises control or direction over 32,236,878 Common Shares, representing approximately 17.48% of the issued and outstanding Common Shares. Catalyst is the third largest individual holder and the largest minority holder of equity securities of HBC.

Catalyst is deeply concerned with the financial terms and structure of the Company-sponsored share buyback (the “Insider Issuer Bid”) outlined in the October 20, 2019 arrangement agreement (the “Baker Group Agreement”) between insiders led by Mr. Richard Baker (the “Baker Group”) and the Company. The Insider Issuer Bid only uses assets of the Company which belong to all shareholders. Catalyst believes the Insider Issuer Bid is inadequate and undervalues the Company on multiple metrics. The Insider Issuer Bid also has substantial negative tax consequences to a significant number of shareholders.

As a consequence, Catalyst is offering HBC shareholders a superior, independently financed, all-cash transaction that can be completed in a timely manner, subject to a short period to complete customary due diligence. Catalyst is prepared to consider making a higher offer based on the results of its due diligence and the cooperation of the Special Committee, and is also prepared to allow other shareholders to be co-equity sponsors to join its offer. Catalyst expects that its offer could be voted on by shareholders and closed by February 2020. The letter to the HBC Board outlining the superior offer is appended below (Appendix A). Catalyst urges the HBC Board and the Special Committee to act in the best interest of all shareholders and fairly evaluate Catalyst’s superior offer.

Gabriel de Alba, Managing Director and Partner of Catalyst, said, “We are pleased to offer all HBC shareholders a superior offer to the flawed and coercive transaction constructed by Richard Baker. The Catalyst offer is independently financed, superior in both value and treatment of shareholders and can be completed in a timely manner.

“It has been a revelation to us how far Richard Baker will go to acquire this iconic company for as cheaply as possible, without putting up a penny of his own money. Last year insiders disclosed a value of $28 per share for the real estate and now they want us to believe that over $2.5 billion of value has conveniently and suddenly disappeared. HBC has not protected its minority shareholders and has allowed its large and sophisticated shareholders, apparently in breach of a standstill and duty of confidence, to create a control position with the benefit of insider information. This ultimately led to a corrupted valuation process in which metrics were handpicked to guide to a desired conclusion.

“Shareholders deserve and demand better. The HBC Board now has the opportunity to fulfill its fiduciary duty and maximize value for all shareholders. Catalyst is committed to taking the necessary steps to ensure that its superior offer is evaluated on its merits and that the Board is able to liberate itself from the coercive influence of Richard Baker and act for us all. We are prepared to participate in an open, fair and competitive auction process.”

Catalyst Files Complaint with the Ontario Securities Commission

Catalyst has reviewed in detail the disclosures by HBC related to the Insider Issuer Bid, the Company’s background to the Baker Group proposal and agreement as well as historical disclosures. Catalyst believes that the conduct by the Baker Group is unprecedented in the manner in which insiders of the Company have designed and put forward a coercive offer through a non-arm’s length process that sought to preclude alternative bidders. The Insider Issuer Bid follows an earlier failed attempt by Richard Baker to acquire the Company and is inconsistent with HBC’s consistently bullish claims about the value of the underlying real estate. As a result, Catalyst was compelled to file a complaint with the Ontario Securities Commission (the “OSC”) regarding various matters, some of which are outlined below.

Timing of SIGNA Transaction is Highly Suspect

On June 10, 2019, at 8:56 AM, the Company announced the sale of its remaining European real estate and related joint venture to its partner SIGNA for $1.5 billion (“SIGNA Transaction”).

On June 10, 2019, at 9:01 AM, the Baker Group announced their initial $9.45 per share offer

  • The Baker Group offer was conditioned on the completion of the SIGNA Transaction so that proceeds from the sale could be used to buy out the minority shareholders, for the benefit of the Baker Group only

  • The Baker Group would have had to create a consortium, negotiate economic and governance terms of the proposal amongst the multiple members of their group and document these into agreements before the announcement

  • The Baker Group has not released their lock-up/cooperation agreement to the public; it is not clear when the Baker Group commenced negotiations to act together, but it is certain that negotiations took place in parallel with the SIGNA Transaction

It would appear unlikely that the Baker Group could have announced the offer so quickly, which was structured to be contingent upon completion of the SIGNA Transaction, without access to material confidential information. This raises fundamental issues of fairness and is deeply troubling.

Negotiations Were Not Arm’s Length

The Company has stated that the Baker Group Agreement was negotiated between the Company on “one side” and key Company management and advisors on “the other side”

  • The Baker Group hired the historical legal and financial advisors of the Company, who would be familiar with HBC and its operations, to act for the Baker Group in the negotiations

  • The Baker Group includes seven of the directors and officers of the Company, including Richard Baker and Ian Putnam (President, Real Estate and Chief Corporate Development Officer), who are two of the most senior and highly paid members of the Company’s management team

  • The Special Committee sought advice from JP Morgan, which had previously worked for the Company and therefore likely worked closely with Baker

  • The financial advisors and the Special Committee relied on projections and analysis prepared by conflicted management (who will personally benefit from the transaction) to create valuations and financial assessments

  • The Baker Group accessed confidential information of HBC apparently without non-disclosure agreements

  • Fabric Luxembourg Holdings S.à r.l., a member of the Baker Group, is a holder of 50,919,608 preferred shares of the Company and appears to have been in breach of its standstill provisions with the Company

Baker Group’s and Management’s Incentives are Unknown

Benefits to the Baker Group and management are disproportionate to those of minority shareholders

  • The Baker Group and the Company have agreed to an “Agreed Reorganization,” which has not been publicly disclosed and is likely to provide significant benefits to the Baker Group; thereby creating unknown incentives

  • The Baker Group Agreement contemplates that all outstanding restricted share units, (“RSUs”), regardless of whether vested or unvested, are being cashed out, although the Company’s RSU Plan allows RSUs to be rolled over in the event of a change of control transaction

  • Additionally, certain members of management will receive new equity grants as part of a compensation package notwithstanding that their RSUs are being cashed out and their performance share units are being terminated for failure to hit performance targets

  • Minority shareholders are disproportionately and negatively impacted by tax consequences because of the structure used by HBC

    • With the withholding tax factored in for non-residents of Canada and higher taxes for individual Canadian shareholders, the $10.30 per share offer does not, for all practical purposes, appear to represent a meaningful increase from the Baker Group’s original and “inadequate” $9.45 per share offer

Misrepresentations in Circular and Related Breaches of Securities Law

  • The Company fails to provide a summary of the critical appraisal for the Saks Fifth Avenue flagship store, in breach of securities laws

  • As noted above, it is false to state that the Baker Group Agreement was “the result of a robust negotiation process that was undertaken at arm’s length between the Special Committee and its advisors, on the one hand, and the Baker Group and their advisors, on the other hand”

  • In breach of securities law, the Circular does not identify Mr. Ian Putnam, who is part of the majority, and his shareholdings

  • The full benefits to the Baker Group are not disclosed in the Circular

    • Saved costs of undertaking transaction as a share buyback, which is detrimental to the minority shareholders as a result of the significant tax leakage

    • Terms of the “Agreed Reorganization” and potential benefits to the Baker Group are not disclosed

Corrupted Valuations

The valuations and appraisals relied upon by the Special Committee are corrupted, thereby understating the true value of the Company’s real estate

  • Value of Saks Fifth Avenue flagship inexplicably declined by over $2.7 billion

  • The appraisal of Saks Fifth Avenue flagship store was subject to constraints imposed by the Company that may have resulted in an understatement of the full value of the property

  • $825 million of supposed restructuring costs and dead rent expenses were not independently reviewed by specialist advisors and may have been inflated, resulting in less value to minority shareholders

OSC Needs to Act

The Insider Issuer Bid is the result of a deeply flawed process. The Insider Issuer Bid, and the negotiations among the Baker Group leading up to the making of that proposal, could only have been made based on material information that was not generally disclosed. The proposal and related negotiations thus likely involved breaches of management and director fiduciary duties and related duties of confidence. In addition, the Baker Group was formed with the goal of seeking to negate key aspects of the mandate of the Special Committee, including the consideration of any alternative transactions available to the Company, and otherwise acted in a coercive manner to undermine the Special Committee. If this type of transaction and conduct is condoned, it would serve to undermine confidence in the fairness and integrity of the capital markets overall. Catalyst implores the OSC to examine the Insider Issuer Bid and take appropriate action.

Advisors

BTIG, LLC is serving as financial advisor to Catalyst and McMillan LLP as Canadian counsel, and Brown Rudnick LLP and Latham & Watkins LLP as U.S. counsel. Gagnier Communications is serving as strategic communications counsel. Laurel Hill Advisory Group is serving as shareholder communications advisor and information agent.

We urge fellow shareholders to vote AGAINST the Insider Issuer Bid utilizing the proxy mailed to you by HBC

We urge shareholders to VOTE AGAINST the Insider Issuer Bid and all related proposals to be voted upon at the HBC shareholders’ meeting scheduled for December 17, 2019 (the “Meeting”). Your vote matters.

We thank shareholders for their strong support to date. The rejection of the Insider Issuer Bid is a key step for the maximization of shareholder value. Notwithstanding the threats of Mr. Baker and the Company regarding declining share prices if we reject their proposal, we can act together to enhance shareholder value.

IF YOU HAVE ALREADY VOTED ON THE PROXY CARD SENT TO YOU BY HBC AND WANT TO CHANGE YOUR VOTE, YOU CAN STILL DO SO BY SIMPLY RECASTING YOUR VOTE AGAINST. ONLY YOUR LATEST DATED PROXY CARD WILL COUNT.

If you have any questions, or need help executing your vote, contact Laurel Hill Advisory Group at: 1-877-452-7184 or 1-416-304-0211 or email assistance@laurelhill.com. There is a team standing by to assist you.

Additional Information

Catalyst is relying on the exemption under section 9.2(4) of National Instrument 51‐102 ‐ Continuous Disclosure Obligations to make this public broadcast solicitation. The following information is provided in accordance with corporate and securities laws applicable to public broadcast solicitations.

This solicitation is being made by Catalyst, and not by or on behalf of the management of HBC. Laurel Hill Advisory Group will receive a fee of $50,000 for its services as Information Agent plus ancillary payments and disbursements. Based upon publicly available information, HBC’s registered office is at 401 Bay Street, Suite 500, Toronto, Ontario, Canada M5H 2Y4 and its head office is at 8925 Torbram Road, Brampton, Ontario, Canada L6T 4G1. Catalyst is soliciting proxies in reliance upon the public broadcast exemption to the solicitation requirements under applicable Canadian corporate and securities laws, conveyed by way of public broadcast, including press release, speech or publication, and by any other manner permitted under applicable Canadian laws. In addition, this solicitation may be made by mail, telephone, facsimile, email or other electronic means as well as by newspaper or other media advertising and in person by employees of Catalyst. All costs incurred for the solicitation will be borne by Catalyst.

A registered shareholder who has given a proxy may revoke the proxy before it has been exercised by: (i) completing a proxy form that is dated later than the proxy form being revoked and mailing or faxing it to TSX Trust Company so that it is received before 10:00 a.m. (Toronto time) on December 13, 2019 or, if the Meeting is adjourned or postponed, 48 hours prior to the time of the Meeting (excluding Saturdays, Sundays and holidays); (ii) sending a revocation notice in writing to the Corporate Secretary of the Company at its registered office so that it is received at any time up to and including the last business day before the date of the Meeting (the notice can be from the shareholder or the authorized attorney of such shareholder); (iii) making a request in writing to the chair of the Meeting that its proxy be revoked; or (iv) any other manner permitted by law. A non‐registered shareholder may revoke a form of proxy or voting instruction form given to an intermediary at any time by written notice to the intermediary in accordance with the instructions given to the non-registered shareholder by its intermediary. Non-registered shareholders should contact their broker for assistance in ensuring that forms of proxies or voting instructions previously given to an intermediary are properly revoked. None of Catalyst and its directors and officers, or, to the knowledge of Catalyst, any associates or affiliates of the foregoing, has any material interest, direct or indirect, in any transaction since the commencement of HBC’s most recently completed financial year, or in any proposed transaction which has materially affected or will materially affect HBC or any of its subsidiaries, other than as set out herein. None of Catalyst or, to its knowledge, any of its associates or affiliates, has any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter to be acted upon at any upcoming shareholders’ meeting, other than as set out herein.

Shareholders with questions or who need assistance with their proxies can contact the Information Agent:

Laurel Hill Advisory Group
North America Toll Free: 1-877-452-7184
Collect Calls outside North America: 1-416-304-0211
Email: assistance@laurelhill.com

Catalyst continues to consider certain other actions to oppose the Insider Issuer Bid and ensure the success of its offer, including speaking with certain securityholders of the Company and other persons, and the solicitation of proxies from securityholders of the Company in opposition to the Insider Issuer Bid and regarding related matters. Catalyst continues to believe that it and other shareholders of the Company, who taken together beneficially own or exercise control or direction over a sufficient number of Common Shares to prevent shareholder approval of the Insider Issuer Bid, will vote against the Insider Issuer Bid. Depending on market conditions and other factors, Catalyst may in the future increase or decrease its control or direction over securities of the Company through open market transactions, private agreements or otherwise. This press release is also issued pursuant to National Instrument 62-103 - The Early Warning System and Related Take-Over Bid and Insider Reporting Issues, which requires a report to be filed on SEDAR ( www.sedar.com ) containing additional information with respect to the foregoing matters. To receive a copy of the early warning report filed in respect of the above matters, please contact Dan Gagnier as outlined below.

Appendix A

THE CATALYST CAPITAL GROUP INC.

181 Bay Street
Suite 4700, P.O. Box 792
Toronto, ON M5J 2T3
Telephone: 416-945-3000
Facsimile: 416-945-2060

November 27, 2019

CONFIDENTIAL

BY ELECTRONIC MAIL

Special Committee of the Board of Directors
Hudson’s Bay Company
401 Bay Street
Suite 500
Toronto, ON M5H 2Y4
Attention: Mr. David Leith

With a copy to:

Blake, Cassels & Graydon LLP
199 Bay Street
Suite 4000
Commerce Court West
Toronto, ON M5L 1A9
Attn: Jeffrey R. Lloyd and Michael Gans

RE: HUDSON’S BAY COMPANY

Ladies and Gentlemen:

The Catalyst Capital Group Inc., on behalf of investment funds managed by it, (“Catalyst” or the “Sponsor”) is pleased to submit this proposal for the acquisition of all of the voting and equity securities of Hudson’s Bay Company (“HBC” or the “Company”). Please note that capitalized terms used herein, which are defined in the arrangement agreement made as of October 20, 2019 between Rupert Acquisition LLC and the Company (the “Baker Agreement”), shall have the meanings ascribed thereto in the Baker Agreement.

Catalyst exercises control or direction over 32,236,878 Common Shares, representing approximately 17.48% of the issued and outstanding Common Shares, which makes it the third largest individual holder of equity securities of HBC. As such, Catalyst is deeply invested in the long-term value of the equity and the stewardship of HBC.

Catalyst is concerned with the financial terms and structure of the Company-sponsored share buyback outlined in the Baker Agreement (the “Insider Issuer Bid”), which it believes is inadequate and undervalues the Company on multiple metrics. The Insider Issuer Bid also has significant negative tax consequences to a significant number of Shareholders. As a result, Catalyst has sought to provide an alternative to minority Shareholders.

We are therefore pleased to inform you that Catalyst is prepared to acquire all of the issued and outstanding Common Shares not already owned by it, the Preferred Shares on an as-converted basis and related equity securities, for cash consideration of $11.00 per Common Share (the “Catalyst Transaction”). The Catalyst Transaction will have superior tax consequences for non-residents and individual Canadian Shareholders compared to the Insider Issuer Bid since it will be an arm’s length offer. We have no doubt that the Catalyst Transaction is more favourable, from a financial point of view, to the Shareholders (other than the Continuing Shareholders) than the Insider Issuer Bid and the arrangement contemplated under the Baker Agreement.

Catalyst expects that the Catalyst Transaction will be completed by way of a plan of arrangement under the provisions of the CBCA or such other structure as determined based on corporate, tax and securities law and other considerations, and will comply with all applicable laws. The terms of the definitive agreement that will give effect to the Catalyst Transaction (including the conditions to closing) (the “Catalyst Agreement”) will be no less favourable to the Company than the terms set out in the Baker Agreement. Catalyst will also welcome other persons who wish to participate as equity sponsors.

Catalyst believes that the Catalyst Transaction is reasonably capable of being completed without undue delay, and expects that the meeting of Shareholders to approve the Catalyst Transaction can be held, and the Catalyst Transaction completed, by February 2020.

The Catalyst Transaction will not be subject to any financing contingency. Catalyst can confirm that adequate arrangements have been made for the required financing to complete the Catalyst Transaction without undue delay, all as set out in Schedule A hereto. The Sponsor will roll over its equity holdings in the Company (32,236,878 Common Shares) valued at approximately $355 million and will contribute additional cash as required. Equity cash contributions are expected to be not less than $135 million. In addition, we have the support of large international financial institutions and other financing sources (the “Lenders”) to provide additional financing as set out in Schedule A hereto (collectively, the “Sponsor Debt Financing”). The Lenders have indicated that they are highly confident that they can structure and syndicate credit facilities in an amount sufficient to fund the remaining portion of the Catalyst Transaction, as well as provide excess liquidity and additional working capital for the Company on a go forward basis. A portion of the funds from the Sponsor Debt Financing will also be used to repay some of the Company’s indebtedness, including the Company’s existing asset-based revolving credit facility. The Lenders have indicated that they are prepared to begin financial and legal due diligence immediately upon receipt of access, under the terms of a confidentiality agreement with the Company, to information and materials necessary to complete their financial and legal diligence and to structure and document the potential Sponsor Debt Financing.

For Catalyst’s part and the avoidance of any doubt, Catalyst is committed to gaining the support of the Board of Directors and announcing the Catalyst Transaction as a Superior Proposal as soon as possible. Catalyst believes that this process can be finalized within the next 21 days and you should regard this letter as open for your acceptance until 5:00 p.m. (Eastern time) on Friday, November 29, 2019. Your acceptance of this letter will confirm that the Board of Directors considers that the Catalyst Transaction constitutes or would reasonably be expected to constitute or lead to a Superior Proposal.

In conjunction with the drafting and negotiation of the Catalyst Agreement and the finalization and execution of the agreements that would give effect to the Sponsor Debt Financing, Catalyst’s advisors are prepared to commence due diligence on HBC as soon as possible and the Sponsor is prepared to enter into a standard form of confidentiality agreement with HBC. Please provide a copy of such confidentiality agreement at your earliest convenience.

In connection with the Catalyst Transaction, Catalyst has engaged BTIG, LLC as financial advisor, McMillan LLP as Canadian counsel, and Brown Rudnick LLP and Latham & Watkins LLP as U.S. counsel. Please have your financial or legal advisor contact Dennis King of BTIG, LLC at 212-738-6194 or Paul Davis of McMillan LLP at 416-307-4137 should you have any questions in relation to this letter.

Please do not hesitate to contact the undersigned should you wish to discuss the above.

Yours truly,

THE CATALYST CAPITAL GROUP INC.,
on behalf of investment funds managed by it

per:

"Gabriel de Alba"________________


Gabriel de Alba


Managing Director and Partner

AGREED AND ACCEPTED THIS ____ DAY OF NOVEMBER, 2019:

HUDSON’S BAY COMPANY

per:

________________________________


Name:


Title:



cc:

David Schwartz


EVP, General Counsel & Corporate Secretary


Hudson's Bay Company

SCHEDULE A

Sources of Funds (in millions of CDN$)
(US$:CDN$ 1:1.32)

Equity Cash Contributions(1)

$135.0

ABL and FILO(2)

$2,409.0

Term Loan(3)

$363.0

Additional Secured Financing(4)

$600.0

Total

$3,507.0

Notes:


(1)

Equity Cash Contributions excludes the 32,236,878 Common Shares currently held by the Sponsor.

(2)

ABL and FILO comprises of: (i) a up to CDN$2,310m (US$1,750m) senior secured credit facility and (ii) a CDN$99m (US$75m) senior secured first-in, last-out credit facility.

(3)

Term Loan consists of a senior secured term loan of CDN$363m (US$275m).

(4)

Additional secured financing of CDN$600m, for which the Sponsor has received two independent highly confident letters from large financial institutions.

Use of Proceeds (in millions of CDN$)
(US$:CDN$ 1:1.32)

Aggregate purchase price for issued and
outstanding Common Shares, Preferred Shares,
RSUs, DSUs, in-the-money Options and Phantom
Share Units(1)

$2,375.7

Repayment of Global ABL(2)

$865.0

Repayment of Other Loans

$27.0

Total(3)

$3,267.7

Notes:


(1)

Common Shares, Preferred Shares, RSUs and DSUs per Circular, Phantom Share Units per Arrangement Agreement and in-the-money options per HBC's 2018 Annual Consolidated Financial Statements.

(2)

Outstanding Global ABL as of August 3, 2019.

(3)

Uses exclude excess liquidity.

Liquidity At Close (in millions of CDN$)
(US$:CDN$ 1:1.32)

Excess Liquidity

$239.3

Cash and Cash Equivalents(1)

$21.0

Proceeds from the Europe Sale(2)

$976.1

Total

$1,236.4

Notes:


(1)

Cash and cash equivalents as of August 3, 2019.

(2)

Proceeds from HBC Europe Sale per Circular.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this press release, including statements regarding completion of the Catalyst transaction, timing of the shareholder meeting in connection therewith, structure and closing of and financing for the Catalyst transaction, and Catalyst and other shareholders’ intention to vote against the Insider Issuer Bid, contain “forward-looking statements” and are prospective in nature. Forward-looking statements are not based on historical facts, but rather on current expectations and projections about future events, and are therefore subject to risks and uncertainties that could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as “plans”, “expects”, “intends”, “anticipates”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “should”, “would”, “might” or “will” be taken, occur or be achieved. Although Catalyst believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed on such statements. Material factors or assumptions that were applied in formulating the forward-looking information contained herein include the assumption that the Catalyst transaction will be completed in a timely manner and with the support of the Special Committee and approved by HBC shareholders, that Catalyst will be able to secure the necessary financing to complete its proposed transaction, satisfaction of due diligence, that shareholders who currently oppose the Insider Issuer Bid will continue to do so, the business and economic conditions affecting HBC’s operations will continue substantially in the current state, including, without limitation, with respect to industry conditions, general levels of economic activity, continuity and availability of personnel and third party service providers, local and international laws and regulations, foreign currency exchange rates and interest rates, inflation, and taxes, and that there will be no unplanned material changes to HBC’s facilities, operations and customer and employee relations. Catalyst cautions that the foregoing list of material factors and assumptions is not exhaustive. Many of these assumptions are based on factors and events that are not within the control of Catalyst and there is no assurance that they will prove correct. Important factors that could cause actual results, performance or achievements to differ materially from those expressed or implied by such forward-looking statements include, among other things, actions taken by HBC or the Baker Group with respect to Catalyst’s offer, the Insider Issuer Bid and agreements entered into among HBC and the Baker Group, Catalyst’s ability to secure the necessary financing to complete the Catalyst transaction, the results of Catalyst’s due diligence on HBC, industry risk and other risks inherent in the running of the business of HBC, foreign currency exchange rates and interest rates, general economic conditions, legislative or regulatory changes, changes in income tax laws, and changes in capital or securities markets. These are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in any of Catalyst’s forward-looking statements. Other unknown and unpredictable factors could also impact its results. Many of these risks and uncertainties relate to factors beyond Catalyst’s ability to control or estimate precisely. Consequently, there can be no assurance that the actual results or developments anticipated by Catalyst will be realized or, even if substantially realized, that they will have the expected consequences for, or effects on, Catalyst or HBC and their respective future results and performance. Forward-looking statements in this press release are based on Catalyst’s beliefs and opinions at the time the statements are made, and there should be no expectation that these forward-looking statements will be updated or supplemented as a result of new information, estimates or opinions, future events or results or otherwise, and Catalyst disavows and disclaims any obligation to do so, except as required by applicable law.

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SOURCE The Catalyst Capital Group Inc.