German Signa Holding’s “unsolicited” bid for German department store chain Galeria Kaufhof has been rejected. Hudson’s Bay Company’s board, which currently owns the chain, unanimously voted no.
Three billion is “not enough”
Galeria Kaufhof is Germany’s largest department store chain and it also owns the sixteen Belgian Galeria Inno department stores. Both will remain part of Canadian Hudson’s Bay Company despite Signa Holding expressing an interest since November 2017. Austrian René Benko’s German investment fund has owned German department store chain Karstadt since the summer of 2014 and lost out to the Canadians in 2015. He has long yearned for a merger of both German chains and he was apparently willing to pay three billion euro this time around.
Hudson’s Bay Company’s board “unanimously decided that Signa’s bid is not in HBC shareholders’ best interest”. The press release also refers to a “significant under-evaluation of its German business and its real estate”, according to director David Leith. He claims to have carefully studied the proposal and to have evaluated it with his financial and legal councilors.
Hudson’s Bay is also active in the Netherlands and emphasized that its European division “is an important pillar for its long-term strategy”. Nevertheless, CEO Richard Baker has left a small opening: “As always, we will continue to carefully examine every possible opportunity to create additional shareholder value.”
German main office restructured
Galeria Kaufhof has struggled with waning turnover for years and has also been onerous. The group appointed a new CEO, Roland Neuwald, in November and he has to get the chain back on track. He announced yesterday that about 400 jobs (a quarter) at its main office in Cologne will be cut by 2020, an attempt to get labour costs under control.
At the same time, he announced a willingness to expand its collaborations with French perfume chain Sephora and British fashion chain Top Shop. Another twenty stores will also be remodeled. These are all moves meant to make the department stores more appealing to consumers.