Saks has a new owner.
Hudson's Bay, a Canadian company that also operates Canadian retailer The Bay, will pay $2.4 billion in cash for the department store--or, $16 a share, about 4.5 percent higher than Saks’s closing price on Friday. To finance the deal, Hudson's Bay will issue $1 billion of new stock and $400 million of new bonds, and will borrow about $1.8 billion of new loans. Even with the new debt, the deal is valued at about $2.9 billion.
“We are excited about what this opportunity and being part of a much larger enterprise can mean for the future of the Saks Fifth Avenue brand,” Steven I. Sadove, the chief executive of Saks, told the Times.
So what does this mean for shoppers? Well for one, being part of a larger corporation might afford Saks the ability to expand, either with new stores or categories (like say, an in-house line or restaurants); when HBC acquired Lord & Taylor in 2010, a handful of new stores were opened, which marked Lord & Taylor's first expansion in 10 years. Speaking of Lord & Taylor, the merger could mean the two department stores--somewhat competitive with one another, though L&T is more downmarket--might join forces in some ways.
And for Canadian shoppers, this merger is particularly good news: According to the New York Times, HBC will be introducing Saks Fifth Avenue stores, Off Fifth outlets and the Saks Web site into Canada. Holts will finally have some competition.