Saks Incorporated has provided an update on ‘go shop’ period, which was announced when the company agreed to sell itself to a Canada’s private retailer Hudson’s Bay for $2.9 billion, including debt, in Jul, 2013. Hudson’s Bay, parent of apparel chains like Lord & Taylor’s in the U.S. and Hudson’s Bay in Canada, will pay $16 per share to secure the transaction.
Per the merger agreement, Hudson’s Bay provided a 40-day ‘go shop’ period according to which Saks could find more suitable alternate proposals. However, the ‘go shop’ period expired on Sep 6, 2013 and the company could not find a third party within that period.
Since the company couldn’t find any superior proposal for its shareholders, Saks is now subject to customary “no-shop” provisions, as per the merger agreement,. which is expected to close by the end of 2013.
The combined entity will form a coast-to-coast North American retail portfolio with 320 stores, including 179 full-line department stores, 72 outlet stores and 69 home stores in prime retail locations throughout the U.S. and Canada, along with three e-commerce sites.
Moreover, the combined entity will share a dominant position in the luxury apparel industry of the Canadian markets through Hudson’s already-established market in the region. This is particularly significant as major players like Nordstrom Inc. (JWN - Free Report) and Target Corp. (TGT - Free Report) are planning to expand their presence in Canada in the current fiscal year.
Saks currently holds a Zacks Rank #4 (Sell). Another stock in the retail and wholesale sector worth considering is Citi Trends Inc. carrying a Zacks Rank #1 (Strong Buy).