October 16, 2017 / 3:27 PM / a year ago

HBC falls after shelved Nordstrom privatization plan drags down retailers

TORONTO/BENGALURU (Reuters) - Shares in Hudson’s Bay Co, which is reviewing strategic options including privatization, fell as much as 5.5 percent on Monday, after rival Nordstrom Inc’s failed attempt to go private spooked sentiment for other U.S. retailers, analysts said.

FILE PHOTO - People walk into the Hudson's Bay Company (HBC) flagship department store in Toronto, Ontario, Canada on January 27, 2014. REUTERS/Mark Blinch/File Photo

Earlier on Monday, U.S. upscale retailer Nordstrom said its founding family had suspended attempts to take it private for the rest of the year due to difficulties in arranging debt financing ahead of the holiday season.

Hudson’s Bay, the owner of Saks Fifth Avenue and Lord & Taylor, was down 4.4 percent to C$11.76 at 1903 GMT, while the broader Toronto stock benchmark was flat. HBC fell to the day’s low of C$11.62, its lowest in nearly six weeks.

The U.S. S&P Retail index lost as much as 0.5 percent, and was last down 0.1 percent. Macy’s Inc retreated 2.4 percent, L Brands pulled back 1.2 percent and JC Penney fell 0.4 percent.

“My...impression is that the stock is reacting to Nordstrom news,” a retail analyst, who not authorized to speak about the matter publicly, said.

A Hudson’s Bay spokesman declined to comment.

Shares of Nordstrom slumped as much as 7.1 percent to $39.63, their lowest since May, and were at $40.59 at 1905 GMT, compared with the benchmark S&P 500 stock index, which rose 0.1 percent.

Hudson’s Bay’s largest shareholder and executive chairman, Richard Baker, is looking for a new strategy after unsuccessful attempts this year to merge Hudson’s Bay with U.S. department store operators Macy’s and Neiman Marcus, Reuters reported in August.

The review will consider all available options, from the possibility of the company going private to potential sales of retail assets and real estate.

U.S. activist investor Jonathan Litt has called for Hudson’s Bay to consider going private and to monetize its vast real estate holdings.

Reporting by Nichola Saminather and Ahmed Farhatha; Additional reporting by Solarina Ho; Editing by Bernadette Baum and Marguerita Choy

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