Hudson's Bay Co. (HBC.T), which operates department stores in
Canada and owns Lord & Taylor in the U.S., has emerged as a
potential suitor for Saks Inc. (SKS), according to a person
familiar with the matter.
Saks recently tapped Goldman Sachs Group Inc. (GS) to explore
strategic alternatives for the company, which operates the Saks
Fifth Avenue luxury department stores and Off-5th outlets, people
familiar with the situation said.
Richard Baker, chief executive of Hudson's Bay, has long been
interested in Saks for the potential of its real estate, the person
familiar with the matter said. Hudson's Bay could convert some of
its Canadian stores to Saks or Off-5th locations, while Lord &
Taylor could take over some Saks leases in the U.S., this person
said.
Saks has been trying to shed stores, and some analysts predict
it could close roughly half its locations in coming years.
Women's Wear Daily earlier reported on Hudson's Bay's
interest.
Separately, Saks's main rival, Neiman Marcus Inc., on Monday
filed papers for an initial public offering. Owners TPG and Warburg
Pincus LLC, who took the company private in 2005, could sell up to
$100 million worth of shares, the filing said.
An IPO filing doesn't rule out the possibility that Neiman
Marcus could choose to sell itself. In addition to being tapped as
the lead underwriter in an IPO, Credit Suisse Group AG has also
been sounding out potential suitors, including sovereign wealth
funds, people familiar with the matter have said.
Neiman Marcus recently rebuffed a proposal in which buyout firm
KKR & Co. would invest in Saks and the two luxury retailers
would merge, people familiar with the situation have said.
A potential wrinkle in any deal to sell Saks is the run-up in
the company's share price since news emerged in May that the
company was considering strategic alternatives. As of mid-morning
on Monday, Saks's shares were trading at $13.53, compared with the
$10-$11 range for the stock for much of the past year.
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