Sears Canada Inc said it plans to cut jobs and close about a quarter of its stores as it restructures its operations after a steady decline in its sales due to competition from big-box retailers and online merchants, Reuters reported. Existing lenders have agreed to provide up to $450 million in interim financing to help the company controlled by U.S. billionaire hedge-fund investor Eddie Lampert focus on selling discounted designer labels and low-priced clothing. About 78 percent of Sears Canada shares are held by Lampert and others close to the company. Sears Canada has total liabilities of $1.1 billion as of April 29, according to financial disclosures.
Home Capital Group Inc said billionaire Warren Buffett's Berkshire Hathaway Inc will provide a new $2 billion (US$1.50 billion) line of credit to its unit Home Trust Co, ending the Canadian lender's strategic review process, Reuters reported. Berkshire will also indirectly buy $400 million of Home Capital's common shares in a private placement through its unit Columbia Insurance Co. It will hold an about 38.39 percent equity stake in the company. Home Capital, Canada's biggest alternative mortgage lender, also said it will continue to explore further asset sales and financing deals over the next year, but has concluded its strategic review process that began in April.
Hong Kong's CK Infrastructure is vying with Canadian investors to buy German metering and energy management group Ista, which could be worth more than 4.5 billion euros (US$5 billion), sources told Reuters. CKI is competing with Canada Pension Plan Investment Board, which already owns a minority stake in Ista and has tied up with the Blackstone Group to make a bid for the full company.
Brookfield Asset Management and Ontario Teachers' Pension Plan also submitted a bid, the sources said. Caisse de dépôt et placement du Québec and Kuwait's Wren House Infrastructure had also expressed interest, but it remained unclear whether they placed offers. Ista is currently owned by European buyout group CVC Capital Partners, which bought it in 2013.
Canadian lender Home Capital Group Inc said it would sell a portfolio of commercial mortgage assets valued at $1.2 billion (US$904 million) to real estate private equity firm KingSett Capital, Reuters reported. Proceeds from the sale will bolster its liquidity and trim outstanding debt on a $2 billion emergency facility it agreed with the Healthcare of Ontario Pension Plan (HOOPP) in April. HOOPP's expensive bridge financing came with an effective interest rate of 22.5 percent on the first $1 billion drawn down. That affected the company's ability to originate new mortgages since it could not afford to lend money at lower rates than its cost of borrowing.
U.S. activist investor Jonathan Litt on Monday called for Canada's Hudson's Bay Co to consider going private and to monetize its vast real estate holdings, sending shares in the owner of Saks Fifth Avenue up 13 percent, Reuters reported. Litt made the request to the board of directors in a letter which disclosed his investment firm Land & Buildings Investment Management LLC had acquired a 4.3 percent stake in Hudson's Bay. The company, also known as HBC, said in a statement that it was reviewing the letter from Litt, a former Citigroup real-estate analyst whose activist hedge funds focuses on the property sector.
A group of investors led by U.S. private equity firm Apollo Global Management LLC and Ontario Teachers' Pension Plan will buy a majority stake in U.S. job portal CareerBuilder LLC, Reuters reported. CareerBuilder is owned by Tribune Media Co, TV station operator Tegna Inc and newspaper group McClatchy Co. These current owners will all retain a minority stake. Reuters previously reported that a potential CareerBuilder deal would value the business at more than US$500 million, including debt.
CBRE Group’s agreement to acquire a majority stake in Caledon Capital Management promises to boost the Toronto investment manager’s access to institutional clients and deals worldwide. CBRE, a Los Angeles real estate firm, last week said it would buy a control position in Caledon. Expected to close shortly, the deal is less about an ownership change than it is about “bringing on a strategic partner to grow the business,” Caledon Partner David Rogers told PE Hub Canada. Rogers, formerly head of private equity at Ontario Municipal Employees Retirement System, launched Caledon a decade ago to help institutional investors find new ways to access alternative assets.
Jamieson Wellness, a vitamin and natural health products company, priced its recently filed initial public offering in Canada. The Windsor, Ontario, company plans to raise $300 million from an expected sale of common shares at $14 to $16 per unit, the updated prospectus shows. Founded in 1922, Jamieson was family-owned before being acquired by U.S. private equity firm CCMP Capital Advisors in 2014 for more than $300 million. The IPO will include a secondary sale by CCMP.
Canadian gaming company Gateway Casinos & Entertainment Ltd is in talks with Asia and North America investors for a sale-lease-back agreement for up to three Vancouver properties worth over $500 million (US$378 million), top company executives told Reuters. The Burnaby, British Columbia-based company expects to sign a deal by the third quarter of 2017, Gateway Executive Chairman Gabriel de Alba said in an interview last week, without disclosing the names of the interested parties. Gateway Casinos was bought in 2010 by Toronto-based private equity firm Catalyst Capital Group, which restructured the company, reduced its debt by about $1 billion, and injected $200 million in new capital.
U.S. department store operator Neiman Marcus Group said it had ended talks regarding a partial or full sale of the company, three months after embarking on a review of strategic alternatives under the weight of a US$4.8 billion debt load, Reuters reported. The company's debt pile made any acquisition very hard to structure. Talks between Neiman Marcus and its suitor Hudson's Bay Co, the Canadian owner of high-end department store Saks Fifth Avenue, had made little progress because of this issue. Neiman Marcus does not face any significant debt maturities until 2020, giving its private equity owners Ares Management LP and Canada Pension Plan Investment Board time to try to turn the business around.