Madison International Realty Acquires Interest In Hudson’s Bay Company Public Equity
September 14, 2016
NEW YORK, Sept. 13, 2016 /PRNewswire/ — Madison International Realty and its affiliates (“Madison”), a leading real estate private equity firm and partner in HBS Global Properties, announced that the firm has made an additional investment in Hudson’s Bay Company (TSX: HBC). Madison has acquired 1.3% of Hudson’s Bay common stock, in addition to a previous investment of $200 million in HBS Global Properties, in recognition of the attractive value it represents supported by prime retail real estate properties and iconic global retail brands, including flagships Saks Fifth Avenue and Lord & Taylor department stores.
Andrew Schaffler, Madison’s Director of Listed Real Estate Securities, said Madison’s partnership and endorsement demonstrates recognition of Richard Baker, Gerald Storch, the executive management team, and the Board of Directors’ vision for a best in class multi-branded dominant retailer addressing today’s consumer preferences.
“The significant value embedded in Hudson’s Bay’s real estate is clear and the investment across the store network, digital platform, and into complementary brands will serve to optimize margins and profitability as well as further enhance the inherent real estate value, which can be monetized methodically over time. Similar to successes experienced in Canada, recent investments are already yielding positive results including the upcoming introduction of existing brands in Germany, improving margins in the off-price channel, and corporate synergies,” Schaffler said.
Hudson’s Bay’s balance sheet is well positioned for today’s evolving retail environment with limited maturities and extended term well beyond retail peers, allowing for lower sensitivity to economic cycles and ample runway for return on recently and pro-forma invested capital. The company’s shares have been trading at a discount due to a softer interim retailing environment and recent investment and capital expenditures in its distinctive brands across the globe. Hudson’s Bay offers robust growth potential, including an increasing store count versus peers’ recent closures, and is anchored by valuable prime real estate that is not reflected in the shares today.
Madison International Realty specializes in acquiring partial ownership, joint venture, private REIT and listed real estate shares in prime properties and portfolios in major markets in North America, the U.K. and Western Europe. The firm also provides joint venture equity to owners, sponsors and investors who are seeking to monetize existing equity positions, restructure balance sheets, or to replace existing capital partners.
In July 2016, Madison announced the final closing of its latest fund, Madison International Real Estate Liquidity Fund VI, LP (Madison VI) with $1.39 billion of equity commitments, including side cars, co-investments and GP commitments from a global roster of institutional investors, exceeding its $950 million target.