Will the owner of two of the oldest department store chains in North America be adding a third to his collection?
Richard A. Baker, a shopping mall developer who emerged as a major player in the department store business with his purchases of Lord & Taylor and Hudson’s Bay, is now exploring a bid for Saks, according to a person briefed on the matter.
Saks, a 90-year-old department store chain, hired Goldman Sachs last month to explore a possible sale. Its shares soared to a five-year high after news broke that the company was in play.
Among the potential buyers that have explored purchasing or making an investment in the company are the private equity giant Kohlberg Kravis Roberts & Company and the sovereign wealth fund Qatar Investment Authority, this person said. K.K.R. had also floated an audacious deal that would have merged Saks and Neiman Marcus, which is also on the block, but that outcome is highly unlikely.
On Monday, the private equity owners of Neiman Marcus â€" TPG, Warburg Pincus and Leonard Green â€" filed for an initial public offering. They have owned Neiman Marcus since 2005.
For Mr. Baker, chief executive of Hudson’s Bay, the parent of The Bay stores in Canada and Lord & Taylor in the United States, an acquisition of Saks would cap an extraordinary run of deal-making. In 2006, at the market peak, he acquired Lord & Taylor for $1.2 billion. He later! acquired Hudson’s Bay and combine the two into one company, which posted about $4.1 billion in revenue during its 2012 fiscal year.
Last November, Mr. Baker orchestrated an initial public offering of Hudson’s Bay, listing the company on the Toronto Stock Exchange.
Adding Saks to his portfolio holds great appeal to Mr. Baker, 47, who lives in Greenwich, Conn., and is based in New York. In the United States, there are significant synergies between the Saks and Lord & Taylor, whose flagship stores are 11 blocks from one another on Fifth Avenue. And there is also growth potential in Canada for both Saks Fifth Avenue department stores and and its discount arm, Off 5th.
Should Mr. Baker make a bid for Saks, there would also, presumably, be a real estate angle. After acquiring Hudson’s, Mr. Baker struck a complex deal to sell the rights to leases on an under-performing division Hudson’s Bay to Target for about $1.8 billion. The deal enabled him to pay down a large amount of debt.
Mr. Baker’s interest in Saks was first reported on Monday by Women’s Wear Daily. Shares of Saks were flat at $13.49 in trading on the New York Stock Exchange.
