Reports: Hudson's Bay Close To Acquiring Saks

(RTTNews) - Retail chain Saks Inc. (SKS) is close to an agreement to be bought by Canadian department-store chain Hudson's Bay (HBC.TO), owner of Lord & Taylor, reports said Sunday. The deal is expected to be announced Monday.

While the purchase price is not yet clear, it is speculated that the offer may be between $17 and $18 per share. Hudson's Bay is previously said to have offered $15 to $16 per share for Saks, which has a market capitalization of over $2.2 billion.

Hudson's Bay's Chief Executive Richard Baker is a real-estate investor. The acquisition of Saks will add many real-estate options to the Canadian firm, in addition to the high-end luxury chain. Baker may convert some Saks locations to Lord & Taylor, thus making better use of the combined real-estate assets.

Baker may also establish Saks Fifth Avenue in Canada, amid Nordstrom's plans to enter the Canadian market. At the end of its last quarter, Saks operated 42 Saks Fifth Avenue stores and 66 outlet stores.

Mexican billionaire Carlos Slim and Italian luxury magnate Diego Della Valle, two largest shareholders of Saks who together own 30 percent of the company, are said to have agreed to the proposal.

Saks Chairman and CEO Steve Sadove may leave the firm once the deal is completed. The company, which is yet to recover fully from recession, had hired Goldman Sachs Inc. (GS) to explore strategic alternatives.

Real-estate baron Barry Sternlicht as well as a Middle Eastern sovereign-wealth fund had reportedly shown interest in Saks.

SKS closed up 0.9 percent on Friday at $15.31. HBC.TO settled up 0.2 percent at C$16.49.