The company, said Land & Buildings in a letter to Hudson’s Bay, called the company, “one of those rare diamonds in the rough that a real estate investor occasionally finds in a career, where the value of the real estate, which the Company estimates is worth C$35 per share, could be worth 4 times the current share price of C$8.88″. Royal Bank Of Canada restated a sector perform rating and set a C$13.00 target price on shares of Hudson’s Bay Co in a research report on Monday, June 5th.
TORONTO, June 19 CI Investments portfolio manager Joshua Varghese said on Monday he would like Hudson’s Bay Co to address USA activist investor Land & Buildings Investment’s call for the retailer to unlock the value of its real-estate holdings.
Land and Buildings urged Hudson’s Bay board to copy the strategy of Vornado Realty Trust CEO Steve Roth. “What about a hotel?”
Stamford, Connecticut-based Land and Buildings put Hudson’s Bay Company on notice Monday morning.
Litt added the retailer’s real estate could be worth $35 per share, almost four times more than the stock’s closing value on Friday.
This drastic public markets mispricing is why Hudson’s Bay should evaluate all strategic options to maximize value for shareholders, including monetization or repurposing of real estate or the Company being taken private by management.
The family, which had been fighting against Litt and his fund, Land and Buildings Investment Management, appear to have voted their entire stake for the incumbent directors. The company has said in the past that the building is worth US$3.7 billion. Or office? Or boutique retail stores the likes of Apple and Gucci? In Canada, it has partnered with RioCan Real Estate Investment Trust in the RioCan-HBC Joint Venture.
In the previous year, Litt has pushed for the sale of Brookdale Senior Living Inc, Forest City Realty Trust Inc and FelCor Lodging Trust Inc. Even if the real estate is worth half the Company’s estimate, the shares would still be worth double today’s share price, “it wrote”.
Last week, at the company’s annual general meeting, HBC chairman Richard Baker said that the company “will continue to strive to highlight the value” of its real estate assets, whether that be a sale or potentially engaging in a public listing.
In 2014, the Saks Fifth Avenue flagship was valued at $3.7 billion, making it one of the most valuable retail assets in the country.
Hudson’s Bay Co (hbc) is facing pressure from an activist investor to either go private or redevelop some of its best real estate to prop up a stock that has taken a beating among chronically weak sales at the department store operator.