Battle for takeover of Hudson's Bay Company escalates, leading to increased losses

Westport Innovations Receives Higher Takeover Bid, but Q3 Results Paint a Different Picture

Westport Innovations Inc., a company that specializes in alternative fuel systems, has received a takeover bid of CA$11 per share from Catalyst Capital, surpassing an earlier offer from another shareholder group led by HBC Governor Richard Baker. However, the company's third-quarter results tell a different story.

The company reported a net loss of CA$226 million, a significant increase from the previous year. This loss, coupled with a decline in gross profit margin by 120 basis points to 38.3%, has been a source of concern for the interim CFO, Becky Roof, who described the quarter as "noisy."

The company's woes are not limited to the Canadian market. Westport Innovations has seen a decrease in total comparative sales (comps) by 1.7%, and retail sales specifically dropped to CA$1.82 billion from the previous year. E-commerce sales, however, showed a positive trend, rising by 15% year-over-year.

In an effort to streamline operations, Westport Innovations has downsized its Saks Off 5th footprint and shuttered its Canadian home retail business. The company is also focusing on its Hudson's Bay and Saks Fifth Avenue department stores, while selling off its European holdings in the Netherlands and Germany.

Despite the challenges, the company's strategy remains the same, whether private or public. CEO Helena Foulkes is considering downsizing in the labor force, including in the corporate ranks, as a means to improve efficiency.

The special committee of the board, which had initially endorsed the takeover bid of CA$10.30 per share from the Baker group, is now encouraging shareholders to approve the higher bid from Catalyst Capital. However, the company is also urging shareholders to approve the Baker offer, creating a complex situation for investors.

As Westport Innovations navigates these changes, it remains to be seen how the company will fare in the future. The takeover bids and strategic changes indicate a significant shift in the company's direction, and investors will be watching closely to see how these changes impact the company's financial performance.