TORONTO - A U.S. regulatory filing says Saks Inc. has agreed in principle to settle suits filed by some of its shareholders, who objected to the U.S. retailer's US$2.9 billion friendly takeover by Hudson's Bay Co. (TSX:HBC).
Saks has agreed to make additional disclosures before its shareholders vote on the deal and HBC has agreed to accept less time for matching a rival offer and a smaller termination fee if the original deal doesn't close as expected by year's end.
The filing says the settlement won't affect the amount that HBC will pay to acquire Saks, one of the world's leading luxury brands.
HBC announced the deal in July, saying it planned to open up to seven full-line Saks stores in Canada as well as two dozen locations under its Saks Off Fifth discount stores.
The lawsuits alleged, in general, that Saks had reached an agreement that made it too difficult for rivals to mount a counter offer against HBC.
Under the proposed settlement, Hudson's Bay has agreed to a US$5-million reduction in the termination fee it could receive if Saks doesn't close the deal. The fee was originally $73.5 million and will be reduced to $68.5 million.
HBC will also get less time — three business days instead of four — to "match" a rival offer. Saks will also get an additional 24 hours, bringing the total to 72 hours, before it must alert HBC that it has received a confidential rival offer.
The U.S. filing says a memorandum of understanding signed by the parties will seek to withdraw the litigation, subject to court and other approvals.
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