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Transaction/Case Details

Rhône Capital to make US$500 million equity investment in HBC

BUSINESS SECTOR

Financial Services

LEAD OFFICE

Toronto

VALUE

500 Million USD


OVERVIEW

On October 24, 2017, Rhône Capital (“Rhône”) and HBC entered into a subscription agreement pursuant to which Fabric Luxembourg Holdings S.à r.l. (the “Purchaser”), an investment vehicle affiliated with Rhône, subscribed for 50,919,608 HBC’s Series A convertible preferred shares (“Preferred Shares”) at US$9.82 (C$12.42) per share for an aggregate purchase price of US$500 million (C$632 million) (the “Private Placement”). The Purchased Shares will represent 100% of the issued and outstanding Preferred Shares upon closing of the Private Placement. In connection with the Private Placement, HBC has concurrently entered into an investor rights agreement with Rhône that provides for, among other things, customary demand and piggyback registration rights, general transfer restrictions subject to limited exceptions, and certain negotiated governance and director nomination rights.

The Private Placement is a part of a series of strategic transactions with Rhône Capital (together with Rhône Group and affiliates), WeWork Companies, and an affiliate of WeWork Property Advisors (a joint venture between WeWork and Rhône), aimed at maximizing the productivity and value of HBC’s global real estate assets.

Rhône is a leading global alternative investment management firm. WeWork provides shared workspace, community, and services for entrepreneurs, freelancers, startups and small businesses. HBC is a diversified global retailer and owns Hudson's Bay, Lord & Taylor, Saks Fifth Avenue, Gilt, and Saks OFF 5TH.

McCarthy Tétrault LLP advised Rhône as Canadian counsel, with a team led by Robert Hansen that included Sven Milelli, Adam Taylor, Scott Bergen, Andrea Kareclas, Elaine Sun, Shauvik Shah (Business), Patrick McCay, Yaroslavna Nosikova (Tax), Oliver Borgers and Jonathan Bitran (Competition).

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