Hudson's Bay Co. (HBC.TO) said it has entered into agreements with Simon Property Group Inc. (SPG) and RioCan Real Estate Investment Trust (REI.UN_TO) to form two joint ventures focused on real estate growth opportunities in the U.S. and Canada, respectively. The ventures are valued at C$4.2 billion.
The C$1.1 billion in expected cash proceeds from the joint venture transactions, net of expenses, will be used to reduce debt on HBC's balance sheet.
These joint ventures will enable HBC to leverage the expertise of market leading real estate companies to build on the strength of its existing real estate assets and identify new real estate growth opportunities. The transactions are structured to facilitate an IPO or other monetization transaction of each joint venture at a later date.
Each transaction has been approved by HBC's board of directors. Both transactions are expected to close in 90 days.
The management values HBC's total real estate portfolio at over C$9 billion.
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