Catalyst Capital Letter To Shareholders Re: Variation of Offer to Purchase Common Shares of Hudson's Bay Company

TORONTO, Aug. 5, 2019 /PRNewswire/ -

TO:       Shareholders of Hudson's Bay Company (TSX: HBC)

VARIATION OF OFFER TO PURCHASE COMMON SHARES OF HUDSON'S BAY COMPANY

This letter amends and supplements the offer by The Catalyst Capital Group Inc. ("Catalyst"), on behalf of investment funds managed by it (such funds and Catalyst are referred to herein as the "Offeror"), to purchase up to an aggregate of 14,836,795 common shares ("Common Shares") of Hudson's Bay Company ("HBC"), including any Common Shares that may become issued and outstanding upon exercise, exchange or conversion of convertible securities after July 22, 2019 but before the Expiry Time (as defined below), at a price equal to $10.11 per Common Share in cash (the "Original Offer"), in order to increase the maximum number of Common Shares to be purchased under the Original Offer to 19,782,393 Common Shares, including any Common Shares that may become issued and outstanding upon exercise, exchange or conversion of convertible securities after July 22, 2019 but before the Expiry Time (the Original Offer as amended by this letter is referred to as the "Offer").

Except as expressly otherwise set forth in this letter, the terms and conditions set forth in the letter to shareholders dated July 22, 2019 (the "Original Letter") in respect of the Original Offer continue to be applicable in all respects. This letter should be read in conjunction with the Original Letter and the letter of transmittal that accompanied the Offer on the date hereof (the "Letter of Transmittal"). For greater certainty, and notwithstanding any provision in this letter or the Original Letter, a registered holder of Common Shares who wishes to accept the Offer may use the letter of transmittal that accompanied the Original Letter on the date of the Original Offer (the "Original Letter of Transmittal"). Completion, execution and tender of the Original Letter of Transmittal or a manually executed facsimile thereof, together with any other documents required by the Original Letter of Transmittal, to the Depositary and Information Agent (as defined below) will constitute an acceptance of the Offer. For greater certainty, if a registered shareholder of Common Shares submits both the Original Letter of Transmittal and the Letter of Transmittal regarding deposit of the same Common Shares, only the instructions relating to the later dated instrument will be accepted.

Unless the context requires otherwise or unless otherwise defined herein or amended hereby, defined terms used in this letter have the meanings given to them in the Original Letter or the Letter of Transmittal. The term "Offer" means the Original Offer, as expressly amended and supplemented by this letter and the Letter of Transmittal.

Catalyst's press release dated of even date herewith sets out the rationale behind the Offer and we urge all registered and beneficial shareholders of HBC ("Shareholders") to refer to such press release and to contact our information agent and depositary for the Offer, Laurel Hill Advisory Group (the "Depositary and Information Agent") at 70 University Avenue, Suite 1440, Toronto, ON, Canada M5J 2M4, or by toll-free telephone in North America at 1-877-452-7184 or by collect call outside North America at 1-416-304-0211 or by email at [email protected] for more information.

1  The Offer

The Offeror has varied the Original Offer by increasing the maximum number of Common Shares to be purchased to 19,782,393 Common Shares (representing approximately 10.75% of the issued and outstanding Common Shares) from 14,836,795 Common Shares (representing approximately 8.06% of the issued and outstanding Common Shares). The consideration under the Offer continues to be $10.11 per Common Share to be paid in cash.

The Offer remains open for acceptance until 5:00 p.m. (Toronto time) on Friday, August 16, 2019, or until such later time that the Offer may be extended or varied (the "Expiry Time"), or, in the event the conditions to the Offer are not met, until the Offer is withdrawn by Catalyst, in each case in its sole and absolute discretion.

In accordance with the terms of the Letter of Transmittal, a Shareholder that validly deposits Common Shares pursuant to the Offer (each, a "Deposited Common Share") will appoint representatives of Catalyst as its nominees and proxy in respect of all Deposited Common Shares that are taken up and purchased under the Offer for any meeting of holders of relevant securities of HBC (whether annual, special or otherwise or any adjournment or postponement thereof). Catalyst is relying on the exemption under section 9.2(4) of National Instrument 51‐102 ‐ Continuous Disclosure Obligations to make a public broadcast solicitation for proxies. For further details, please see Section 5 of this letter.

The Offer is not a formal or exempt takeover bid under applicable Canadian securities laws and regulations.

THE OFFER, AND THE LETTER OF TRANSMITTAL, HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION OR ANY OTHER SECURITIES REGULATORY AUTHORITY (IN CANADA OR ELSEWHERE) OR SECURITIES EXCHANGE, NOR HAS ANY SECURITIES REGULATORY AUTHORITY OR SECURITIES EXCHANGE PASSED UPON THE FAIRNESS OR MERITS OF THE OFFER OR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THE OFFER. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

2  Conditions of the Offer

The Offer is subject to and conditional on the terms and conditions set out in Schedule "A" attached to the Original Letter, as amended by this letter and the Letter of Transmittal.

3  Take Up of Common Shares

If more than the maximum number of Common Shares for which the Offer is made are deposited in accordance with the Offer and not withdrawn at the time of take up of the Deposited Common Shares, the Deposited Common Shares to be purchased from each depositing Shareholder will be determined on a pro rata basis according to the number of Deposited Common Shares deposited by each Shareholder, disregarding fractions, by rounding down to the nearest whole number of Deposited Common Shares. If the conditions of the Offer are satisfied or waived by the Offeror, the Offeror will take up all Deposited Common Shares (or if more than 19,782,393 Deposited Common Shares are tendered, proportionately take up Deposited Common Shares in accordance with the provisions of the Offer) and will pay for such Deposited Common Shares taken up as soon as possible but in any event not later than three (3) business days after such Deposited Common Shares are taken up.

4  Consequential Amendments to the Original Offer

The Original Letter and the Original Letter of Transmittal shall be read together with this letter. Each of the Original Letter and the Original Letter of Transmittal is amended to the extent necessary to reflect the amendments contemplated by, and the information contained in, this letter.

Except as otherwise set forth or amended by this letter, the terms and conditions of the Original Offer and the information in the Original Letter continue to be applicable in all respects.

5  Additional Information

Catalyst is relying on the exemption under section 9.2(4) of National Instrument 51‐102 ‐ Continuous Disclosure Obligations to make a public broadcast solicitation of proxies. The following information is provided in accordance with corporate and securities laws applicable to public broadcast solicitations.

This solicitation is being made by Catalyst, and not by or on behalf of the management of HBC. Laurel Hill Advisory Group will receive a fee of $45,000 for its services as Depositary and Information Agent under the Offer plus ancillary payments and disbursements.  Based upon publicly available information, HBC's registered office is at 401 Bay Street, Suite 500, Toronto, Ontario, Canada M5H 2Y4 and its head office is at 8925 Torbram Road, Brampton, Ontario, Canada L6T 4G1. Catalyst is soliciting proxies in reliance upon the public broadcast exemption to the solicitation requirements under applicable Canadian corporate and securities laws, conveyed by way of public broadcast, including press release, speech or publication, and by any other manner permitted under applicable Canadian laws. In addition, the solicitation may be made by mail, telephone, facsimile, email or other electronic means as well as by newspaper or other media advertising and in person by employees of Catalyst. All costs incurred for the solicitation will be borne by Catalyst.

A registered Shareholder who has given a proxy under the terms of the Letter of Transmittal may, prior to its Deposited Common Shares being taken up and paid for under the Offer, in accordance with Section 148(4) of the Canada Business Corporations Act, revoke the proxy (i) by depositing an instrument or act in writing executed or, in Québec, signed by such registered shareholder or by his, her or its personal representative authorized in writing, either: (a) at the registered office of HBC at any time up to and including the last business day preceding the day of the meeting, or an adjournment thereof, at which the proxy is to be used, or (b) with the chairman of the meeting on the day of the meeting or an adjournment thereof; or (ii) in any other manner permitted by law. A Beneficial Shareholder may revoke a form of proxy or voting instruction form given to an Intermediary at any time by written notice to the Intermediary in accordance with the instructions given to the Beneficial Shareholder by its Intermediary. Beneficial Shareholders should contact their broker for assistance in ensuring that forms of proxies or voting instructions previously given to an Intermediary are properly revoked. None of Catalyst and its directors and officers, or, to the knowledge of Catalyst, any associates or affiliates of the foregoing, has any material interest, direct or indirect, in any transaction since the commencement of HBC's most recently completed financial year, or in any proposed transaction which has materially affected or will materially affect HBC or any of its subsidiaries. None of Catalyst or, to its knowledge, any of its associates or affiliates, has any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter to be acted upon at any upcoming shareholders' meeting, other than as set out herein.

6  Applicable Law

The Offer shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the Province of Ontario and the laws of Canada applicable therein.

7  Language

Each of Catalyst and the Shareholder acknowledges that it has consented and requested that all documents evidencing or relating in any way to this Offer be drawn up in the English language only. Catalyst et le porteur de parts reconnaissent par les présentes avoir consenti et demandé à ce que tous les documents attestant ou se rapportant de quelque manière que ce soit à la présente offre d'achat avec prime visant un petit pourcentage de parts soient rédigés en anglais seulement.

The Depositary and Information Agent for the Offer is:

Laurel Hill Advisory Group
70 University Avenue, Suite 1440
Toronto, ON M5J 2M4

North American Toll Free Phone:
1-877-452-7184

Collect Outside of North America:
1-416-304-0211

E-mail: [email protected]

By Mail:
PO Box 370, STN Adelaide
Toronto, Ontario
Canada M5C 2J5

By Registered Mail, Hand or Courier:
70 University Avenue, Suite 1440
Toronto, Ontario
Canada M5J 2M4

Facsimile:
1-416-646-2415

Any questions or requests for assistance may be directed by Shareholders to the Depositary and Information Agent at its telephone number and location set out above. You may also contact your broker, dealer, commercial bank or trust company or other Intermediary for assistance concerning the Offer.

SOURCE Catalyst Capital Group Inc.

Related Links

www.catcapital.com