An Entity Controlled by Richard A. Baker Agrees to Acquire Common Shares of Hudson's Bay Company from an Affiliate of Ontario Teachers' Pension Plan Board

TORONTO, Jan. 3, 2019 /CNW/ - An entity controlled by Richard A. Baker, Rupert of the Rhine LLC (the "Purchaser"), has entered into an agreement (the "Purchase Agreement") to acquire 17,953,536 common shares (the "Purchased Shares") of Hudson's Bay Company (TSX: HBC) from 2380162 Ontario Limited (the "Vendor"), a wholly-owned subsidiary of Ontario Teachers' Pension Plan Board, at a price of Cdn.$9.45 per share, representing 115% of the "market price" determined in accordance with Section 1.11 of National Instrument 62-104 – Take-Over Bids and Issuer Bids ("NI 62-104"). The acquisition of the Purchased Shares is being made in reliance on the "private agreement exemption" under Section 4.2 of NI 62-104. The Purchaser is an entity controlled directly or indirectly by Richard A. Baker, the Governor and Executive Chairman of HBC, and the Purchaser may be considered a joint actor of L&T B (Cayman) Inc. As a result, L&T B (Cayman) Inc. will be filing an updated early warning report.

"I am very pleased to increase my significant ownership in HBC and further demonstrate my commitment to the company," said Richard Baker. "Ontario Teachers' Pension Plan has been a valued partner since 2013 and I thank them for their support through their investment period."

The closing of the acquisition of the Purchased Shares is anticipated to occur no later than six months following the date hereof, and is subject to customary closing conditions for a transaction of this nature. Upon completion of the acquisition of the Purchased Shares, such shares will become subject to the existing voting agreement pursuant to which voting decisions for common shares of HBC ("Common Shares") held by L&T B Cayman and its joint actors (collectively, the "L&T Group") are made as directed by L&T B Cayman.

The Purchased Shares represent approximately 9.76% of the issued and outstanding Common Shares on a non-diluted basis and 7.54% of the issued and outstanding Common Shares, assuming the conversion as of the date hereof of the outstanding convertible preferred shares of HBC into Common Shares.

At the time of L&T B Cayman's most recent early warning report dated July 9, 2018, the L&T B Group had beneficial ownership or the power to exercise control or direction, directly or indirectly, in respect of the voting of an aggregate of 29,218,802 Common Shares, representing approximately 15.96% of the then issued and outstanding Common Shares on a non-diluted basis and approximately 12.41% of the then issued Common Shares, assuming the conversion of the outstanding convertible preferred shares of HBC into Common Shares.

Immediately following completion of the acquisition of the Purchased Shares, the L&T B Group will have beneficial ownership or the power to exercise control or direction, directly or indirectly, in respect of the voting of an aggregate of 46,032,840 Common Shares, representing approximately 25.03% of the issued and outstanding Common Shares on a non-diluted basis and approximately 19.34% of the Common Shares, assuming the conversion as of the date hereof of the outstanding convertible preferred shares of HBC into Common Shares. In addition, certain joint actors of L&T B Cayman hold long-term incentive equity awards of HBC, which until exercised or settled, as applicable, are not subject to the voting agreement described above.

Upon completion of the acquisition of the Purchased Shares, such shares will be held for investment purposes, and members of the L&T B Group may each acquire further Common Shares, or dispose of its holdings of Common Shares, in accordance with applicable securities laws as investment conditions warrant.

SOURCE L&T B (Cayman) Inc.

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