Paul Weiss, Stikeman Elliott Helping Buyout Firm Acquire Canadian Icon

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July 17, 2008 4:25 PM

Paul Weiss, Stikeman Elliott Helping Buyout Firm Acquire Canadian Icon

Posted by Brian Baxter

The oldest commercial corporation in North America is changing hands.

Toronto-based Hudson's Bay Company (HBC) announced on Wednesday that it would be acquired by private equity fund NRDC Equity Partners, which owns specialty retailers Lord & Taylor and Fortunoff. The deal means that Canada's largest department store chain now has a U.S. owner.

"It's all that anybody's talking up about up here," says Ian Putnam, an M&A partner at Toronto's Stikeman Elliott, which served as Canadian counsel to NRDC on the deal. "Hudson's Bay is a Canadian icon."

Founded in 1670 as a fur trader operating out of outposts surrounding Hudson Bay--a beaver, fox, and moose can be still be seen on the company's coat of arms--HBC eventually moved into the retail business after people stopped wearing beaver pelts.

While the deal value was not disclosed, NRDC did say that it would invest $500 million into a new holding company that will control all of its retail brands.

Advising NRDC are New York's Paul, Weiss, Rifkind, Wharton & Garrison and Stikeman. Paul Weiss M&A partner Bruce Gutenplan, real estate partner Harris Freidus, tax partner Peter Rothenberg, and employee benefits partner Lawrence Witdorchic served as U.S. counsel. Paul Weiss has been outside counsel to NRDC since the buyout firm was founded in 2005.

In addition to Putnam, Stikeman real estate partner Douglas Klaassen, tax partner Dean Kraus, employment and pensions head Lorna Cuthbert, employment and pensions partner Gary Nachshen, environmental partner Larry Cobb, competition counsel Sandra "Sandy" Walker, and associates Andrea Boctor, Janice Campbell, Jeremy Ehrlich, Andrew Elliott, Francesco Gucciardo, James Klein, Jennifer MacArthur, and David Pickwoad served as Canadian counsel to NRDC. The deal was the firm's first for NRDC.

NRDC has been actively acquiring retailers in recent years. It bought Lord & Taylor from Macy's in 2006 for $1.2 billion and in March of this year it picked up Fortunoff's for $110 million after the latter filed for Chapter 11. (Paul Weiss advised NRDC on the Lord & Taylor acquisition.)

NRDC already owned 20 percent of HBC before the deal; the rest of the Canadian retailer belonged to InterTech Group, founded by the late Israeli-American businessman Jerry Zucker. Zucker passed away in 2006 and his estate then divested InterTech from HBC. (M&A partner John Emanoilidis from Toronto's Torys acted as both Canadian and U.S. counsel to Zucker's estate.)

The buyout firm wasted little time shaking things up with its latest acquisition. NRDC has said publicly that it will open several Lord & Taylor outlets at current HBC store locations. On Thursday it appointed former Ralph Lauren executive Jeffrey Sherman as HBC's new CEO.

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