DUESSELDORF/NEW YORK (Reuters) - Canadian retailer Hudson’s Bay signaled on Friday it had no intention of selling German department store chain Kaufhof, after people familiar with the matter said Austrian real estate company Signa Holding was considering a bid.
“We stand 100 percent behind Galeria Kaufhof,” a German spokesman for Hudson’s Bay said. “We have no interest in doing business with Signa.”
Signa tried to buy Kaufhof in 2015, but Hudson’s Bay outbid it by paying 2.42 billion euros ($2.92 billion) for the German chain and its Belgian subsidiary.
On Tuesday, Hudson’s Bay reported a larger-than-expected quarterly loss. While results at its Saks brand were strong, its European operations suffered the biggest fall in comparable sales since the company’s purchase of Kaufhof.
Hudson’s Bay is under pressure from activist hedge fund Land and Buildings, which has pressed the company to explore a sale of Kaufhof and hinted at a potential buyer.
Signa owns Kaufhof’s German competitor Karstadt. The sources had said it was working with an investment bank to line up financing for a takeover offer, but cautioned that Signa had not made a formal offer and might decide not to bid.
Reuters reported on Aug. 25 that Hudson’s Bay had hired a financial adviser to review strategic options, including the possibility of taking the company private..
Land and Buildings, a top 10 shareholder in Hudson’s Bay with a roughly 4 percent stake, said on Wednesday the company was not moving fast enough to address its lagging stock price, and that the hedge fund was aware of a “third party buyer” interested in Kaufhof.
Land and Buildings went on to say that it believed the buyer was willing to pay a premium to what Hudson’s Bay paid in 2015, though the fund did not name the third party.
People familiar with the matter told Reuters on Thursday the third party was Signa. Signa declined to comment.
Additional reporting by Greg Roumeliotis; Editing by Grant McCool and Mark Potter