In early trading on the TSX, HBC shares rose by $1.14 to hit $10.02.
We believe this sequence of events underscores a core fact: the path to maximizing the value of Hudson's Bay lies in its real estate, not its retail brands. According to Litt, the collective real estate holdings of Hudson's Bay are worth four times the company's opening share price on Monday.
"The board's responsibility is to maintain and grow the long-term value of the company".
The investor went on to say that even if the real estate is worth half the HBC estimate, the retailer's shares would still be worth double its Friday closing share price.
Consider that the Saks Fifth Avenue store between 49th Street and 50th Street, across from Rockefeller Center, was recently appraised at C$16 per share net of debt, and is likely one of the most valuable locations not only in Manhattan, but in the United States. Hudson's Bay Co has a 52-week low of $8.08 and a 52-week high of $18.60. The activist investor has suggested selling some of the retailer's prime real estate to be developed into hotels or office buildings. The Company's retail portfolio includes approximately 10 banners, in formats ranging from luxury to better department stores to off price fashion shopping destinations, with over 460 stores.
"Hudson's Bay is a real estate company, full stop", Land and Buildings Founder Jonathan Litt wrote in his letter to the Hudson Bay board of directors.
Shoppers visit the redesigned designer boutique at the Saks Fifth Avenue flagship store, in New York City in this September 2016 photo. To date, the only result of these efforts has been the stock declining almost 25 per cent since the deal talks surfaced, and the company announcing last Thursday that it would be undertaking a massive $350 million restructuring to realign its own business 'to get ahead of the challenging retail landscape, ' " according to the letter. (The) restated a "neutral" rating on shares of Hudson's Bay Co in a research note on Wednesday, May 10th.
Litt said he's looking to be collaborative with the company in unlocking the real estate value.
It says real estate executives speak highly of Richard Baker, a real estate mogul who is HBC's chairman and one of its main investors.
Hudson's Bay Co (TSE HBC) opened at 8.59 on Monday. The correct version of this news story can be viewed at https://transcriptdaily.com/2017/06/19/hudsons-bay-co-hbc-given-a-c28-00-price-target-by-bmo-capital-markets-analysts-updated.html.