Hudson’s Bay Company sells total of $533 million of its equity in HBS Global Properties to three third party investors

Proceeds to be used to reduce debt

TORONTO & NEW YORK, 2015-11-18 — /EPR Retail News/ — (All amounts in US dollars) – Hudson’s Bay Company (“HBC” or the “Company”) (TSX: HBC) is pleased to announce that it has sold a total of $533 million of its equity in HBS Global Properties, HBC’s real estate joint venture with Simon Property Group, to three third party investors. Proceeds from the equity sale, together with cash on hand, will be used to reduce HBC’s outstanding term loan B borrowings from $1,085 million to $500 million.

This equity sale follows the Company’s announcement on September 30, 2015 that it expected to sell between $400and $600 million of equity in HBS Global Properties. The total third party investment of $533 million values HBS Global Properties’ portfolio at $4.5 billion(1)(2) based on a blended capitalization rate of 5.90%, and is comprised of individual investments from the following entities:

  • $250 million equity investment by Ivanhoé Cambridge;
  • $150 million equity investment by Madison International Realty; and
  • $133 million equity investment by a large U.S. pension.

This transaction provides additional third party endorsements of the value of HBC’s real estate ventures while further de-leveraging the Company’s balance sheet. HBC will retain an approximate 63% ownership interest in HBS Global Properties as a result of this transaction and following the contribution of Simon Property Group’s $100 millioncommitment for tenant improvements.

Mr. Richard Baker, Governor and Executive Chairman of HBC, said: “We are thrilled to have three premier real estate investors join HBS Global Properties, bringing with them significant real estate investment expertise. These transactions further demonstrate the substantial value of our real estate portfolio, and our ability to unlock this value for our shareholders. We look forward to working with our partners to significantly expand and diversify the assets ofHBS Global Properties. We believe this will lead to an increase in the value of HBS Global Properties and therefore benefit HBC shareholders.”

As part of the transactions, Ivanhoé Cambridge will be granted representation on the board of directors of HBS Global Properties, raising the total number of board seats from four to five.

From time to time, HBC or HBS Global Properties may sell additional equity in HBS Global Properties, the proceeds of which could be used to further deleverage the Company or fund future acquisitions by HBS Global Properties.

RBC Capital Markets acted as exclusive financial advisor to HBC in connection with the equity sale.

(1) Assumes a EURUSD exchange rate of 1.07
(2) Represents the value of the properties after all transactions are completed, including the post-closing acquisition of certain German real estate properties and the minority interest related to the Kaufhof transaction, expected to occur within 5 months.

About Hudson’s Bay Company
Hudson’s Bay Company (TSX: HBC) is one of the fastest-growing department store retailers in the world, based on its successful formula of driving the performance of high quality stores and their all-channel offerings, unlocking the value of real estate holdings and growing through acquisitions. Founded in 1670, HBC is the oldest company in North America. With the recent completion of its acquisition of GALERIA Kaufhof Group, HBC’s portfolio today includes eight banners, in formats ranging from luxury to better department stores to off price, with more than 460 stores and 65,000 employees around the world.

In North America, HBC’s leading banners include Hudson’s Bay, Lord & Taylor, Saks Fifth Avenue and Saks OFF 5TH, along with Home Outfitters. In Europe, its banners include GALERIA Kaufhof, the largest department store group inGermany, Belgium’s only department store group Galeria INNO, as well as Sportarena.

HBC has significant investments in real estate joint ventures. It has partnered with Simon Property Group Inc. in HBS Global Properties Joint Venture, which owns properties in the United States and Germany. In Canada, it has partnered with RioCan Real Estate Investment Trust in the RioCan-HBC Joint Venture.

Forward Looking Statements

Certain statements made in this news release constitute forward-looking statements within the meaning of applicable securities laws, including, without limitation, statements regarding the pay down of HBC’s outstanding term loan B borrowings, Simon Property Group’s remaining commitments for tenant improvements, the expansion and diversification of the assets of HBS Global Properties, the acquisition of certain German real estate properties, HBC’s pro forma equity interest in HBS Global Properties and the potential future sale by HBC of additional equity in HBS Global Properties. The words “may”, “will”, “would”, “should”, “could”, “expects”, “plans”, “intends”, “trends”, “indications”, “anticipates”, “believes”, “estimates”, “predicts”, “likely” or “potential”, or the negative or other variations of these words or other comparable words or phrases, are intended to identify forward-looking statements. Forward-looking statements are based on current estimates and assumptions made by the Company in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors that it believes are appropriate and reasonable in the current circumstances. However, there can be no assurance that such estimates and assumptions will prove to be correct.

Although HBC believes that the forward-looking statements in this news release are based on information and assumptions that are current, reasonable and complete, these statements are by their nature subject to a number of factors that could cause actual results to differ materially from management’s expectations and plans as set forth in such forward-looking statements for a variety of reasons. Some of the factors – many of which are beyond HBC’s control and the effects of which can be difficult to predict – include, among others: (a) the possibility that the anticipated benefits from HBS Global Properties are not realized; (b) the risk that HBS Global Properties will not be able to expand and diversify its assets or effect a future monetization transaction for the benefit of shareholders of HBC; and (c) credit, market, currency, operational, liquidity and funding risks generally, including changes in economic conditions, interest rates or tax rates.

HBC cautions that the foregoing list of important factors and assumptions is not exhaustive and other factors could also adversely affect its results. For more information on the risks, uncertainties and assumptions that could cause HBC’s actual results to differ from current expectations, please refer to the “Risk Factors” section of HBC’s Annual Information Form dated April 30, 2015, HBC’s second quarter Management Discussion & Analysis dated September 10, 2015, as well as HBC’s other public filings, available at www.sedar.com and at www.hbc.com

The forward-looking statements contained in this news release describe HBC’s expectations at the date of this news release and, accordingly, are subject to change after such date. Except as may be required by applicable Canadian securities laws, HBC does not undertake any obligation to update or revise any forward-looking statements contained in this news release, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on these forward-looking statements.

Media Relations:
Hudson’s Bay Company
Tiffany Bourré, 905-595-7184
Director, External Communications
tiffany.bourre@hbc.com
or
Investor/Media Contact
Investor Relations:
416-256-6745
investorrelations@hbc.com

Source: Hudson’s Bay Company

News Provided by Acquire Media

HBS Global Properties announces the sale of $533 million of equity to three new investors

New investment values HBS Global Properties’ portfolio at US$4.5 billion(1)(2)

NEW YORK, LOS ANGELES & COLOGNE, Germany, 2015-11-18 — /EPR Retail News/ — (All amounts in US dollars) – HBS Global Properties, the real estate joint venture between Hudson’s Bay Company (“HBC”) (TSX: HBC) and Simon Property Group Inc. (“Simon”) (NYSE: SPG), is pleased to announce the sale of $533 million of equity, previously held by HBC, to three new investors.

The third party investment of $533 million values HBS Global Properties’ portfolio at $4.5 billion(1)(2), based on a blended capitalization rate of 5.90%. The investment is comprised of individual investments from the following premier real estate investors:

  • $250 million equity investment by Ivanhoé Cambridge;
  • $150 million equity investment by Madison International Realty; and
  • $133 million equity investment by a large U.S. pension.

HBC received all proceeds from the transaction. As a result of this transaction and the expected contribution of Simon Property Group’s $100 million commitment for tenant improvements, the pro forma ownership of HBS Global Properties will be held approximately as follows. All partner equity has been valued at a 5.9% capitalization rate:

  • 63% by HBC;
  • 13% by Simon Property Group;
  • 11% by Ivanhoé Cambridge;
  • 7% by Madison International Realty; and
  • 6% by a large U.S. pension.

“This investment highlights the value of our existing portfolio of properties. We are excited to combine the expertise of our new investors with our team to continue to grow our portfolio through anticipated accretive acquisitions in the United States and Europe,” said Lee Neibart, Chief Executive Officer of HBS Global Properties. “HBC’s collection of leading retail banners has the opportunity to serve as attractive tenants for a range of retail opportunities which we believe affords HBS Global Properties a significant competitive advantage.”

As part of the transactions, Ivanhoé Cambridge will be granted representation on the board of directors of HBS Global Properties, raising the total number of board seats from four to five.

With the recent acquisition of 41 GALERIA properties, HBS Global Properties now owns an international property portfolio of 83 marquee retail locations across the United States and Germany, including Saks, Lord & Taylor and GALERIA Kaufhof flagship department stores in Berlin, Beverly Hills, Cologne, Dusseldorf, Frankfurt, the greater New York area, and other metropolitan and suburban centers. HBS Global Properties has a mandate to pursue attractive credit tenant, net-leased and multi-tenanted retail buildings in the United States and Europe.

As appropriate, HBS Global Properties may sell new equity, the proceeds of which could be used to fund future acquisitions.

(1) Assumes a EURUSD exchange rate of 1.07
(2) Represents the value of the properties after all transactions are completed, including the post-closing acquisition of certain German real estate properties and the minority interest related to the Kaufhof transaction, expected to occur within 5 months.

For HBC Shareholders – Forward Looking Statements

Certain statements made in this news release constitute forward-looking statements within the meaning of applicable securities laws, including, without limitation, statements regarding the pro forma equity interests of HBC and other investors in HBS Global Properties, future anticipated accretive acquisitions by HBS Global Properties and the potential future sale of new equity of HBS Global Properties. The words “may”, “will”, “would”, “should”, “could”, “expects”, “plans”, “intends”, “trends”, “indications”, “anticipates”, “believes”, “estimates”, “predicts”, “likely” or “potential”, or the negative or other variations of these words or other comparable words or phrases, are intended to identify forward-looking statements. Forward-looking statements are based on current estimates and assumptions made by the Company in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors that it believes are appropriate and reasonable in the current circumstances. However, there can be no assurance that such estimates and assumptions will prove to be correct.

Although HBC believes that the forward-looking statements in this news release are based on information and assumptions that are current, reasonable and complete, these statements are by their nature subject to a number of factors that could cause actual results to differ materially from management’s expectations and plans as set forth in such forward-looking statements for a variety of reasons. Some of the factors – many of which are beyond HBC’s control and the effects of which can be difficult to predict – include, among others: (a) the possibility that the anticipated benefits from HBC are not realized; (b) the risk that HBS Global Properties will not be able to expand and diversify its assets or effect a future monetization transaction for shareholders of HBC; and © credit, market, currency, operational, liquidity and funding risks generally, including changes in economic conditions, interest rates or tax rates.

HBC cautions that the foregoing list of important factors and assumptions is not exhaustive and other factors could also adversely affect its results. For more information on the risks, uncertainties and assumptions that could cause HBC’s actual results to differ from current expectations, please refer to the “Risk Factors” section of HBC’s Annual Information Form dated April 30, 2015, HBC’s second quarter Management Discussion & Analysis dated September 10, 2015, as well as HBC’s other public filings, available at www.sedar.com and at www.hbc.com.

The forward-looking statements contained in this news release describe HBC’s expectations at the date of this news release and, accordingly, are subject to change after such date. Except as may be required by applicable Canadian securities laws, HBC does not undertake any obligation to update or revise any forward-looking statements contained in this news release, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on these forward-looking statements.

Media Contact

HBS Global Properties

Tiffany Bourré
Phone: (905) 595-7184
Email: tiffany.bourre@hbc.com

SOURCE: Hudson’s Bay Company

HBS Global Properties acquires 41 GALERIA Kaufhof properties from Simon Property Group Inc. for €2.6 billion

Portfolio totals 83 properties with an Asset Value of $4.8 billion(1)

NEW YORK, LOS ANGELES & COLOGNE, Germany, 2015-10-5 — /EPR Retail News/ — HBS Global Properties, the real estate joint venture between Hudson’s Bay Company (“HBC”) (TSX: HBC) and Simon Property Group Inc. (“Simon”) (NYSE: SPG), is pleased to announce the acquisition of 41 GALERIA Kaufhof properties (the “Acquisition”) in a transaction valued at €2.6 billion (US$3.0 billion)(1)(2). Unless otherwise indicated, all amounts are expressed in US dollars.

With the Acquisition, HBS Global Properties now owns an international property portfolio of 83 marquee retail locations across the United States and Germany, including flagship department stores in Berlin, Beverly Hills, Cologne, Dusseldorf, Frankfurt, the greater New York area, as well as properties in other metropolitan and suburban centers. These properties generate annual cash rents of $274 million(1), valuing the portfolio at approximately $4.8 billion based on a blended cap rate of 5.75%.

“With the close of the Acquisition, HBS Global Properties is taking an important step forward in its next chapter of growth,” stated Richard Baker, Chairman, of HBS Global Properties. “This joint venture will benefit from a strong foundation of HBC properties, now including GALERIA Kaufhof, whose tremendous value has been recognized by our best-in-class partner.”

“In HBC, we have found a unique partner with a proven track record of creating value from retail properties, as well as a strong portfolio of banners that serve as attractive tenants for a range of retail opportunities,” said David Simon, Chairman and Chief Executive Officer of Simon. “As the Acquisition demonstrates, we continue to leverage our combined expertise to significantly expand and diversify the joint venture assets and increase its value for the benefit of investors.”

HBS Global Properties has established a dedicated management team to focus on overseeing the properties and growing the portfolio, with support from HBC and Simon. This team is headed by Lee Neibart, who has more than 40 years of real estate experience. Lee will lead an executive team comprised of Patrick Walmsley, Chief Investment Officer – USA, and Lutz Rupprecht, Chief Financial Officer and Managing Director – Germany, with the support of additional team members in both Los Angeles and Cologne.

“In a relatively short period of time, we have built a fantastic portfolio of properties,” said Lee Neibart, Chief Executive Officer of HBS Global Properties, “I am excited to work with our team in North America and Europe to continue to grow our portfolio through accretive acquisitions.”

In addition to pursuing attractive credit tenant, net-leased and multi-tenanted retail buildings in the United States and Europe, HBS Global Properties will have a mandate to explore similar international opportunities. The entity is structured to facilitate an IPO or other monetization of the joint venture at a future date.

(1)    Assumes a EURUSD exchange rate of 1.13
(2)    Represents value of properties after all transactions are completed, including the post-closing acquisition of certain real estate properties and the minority interest, expected to occur within 6 months.

Media Contact

HBS Global Properties

Andrew Blecher
Phone: (212) 391 3179
Email: andrew.blecher@hbc.com