Saks Goes to Hudson’s Bay Co.

The Hudson’s Bay Co. (Toronto) has won the Saks sweepstakes. Now it hopes it’s indeed the winner.

North America’s oldest retail organization and operator of Canada’s largest department store chain – as well as Lord & Taylor in the U.S. – has agreed to acquire Saks Inc. (New York) for $2.9 billion, including debt, according to Bloomberg News.

The purchase price of $16 a share will be paid in cash, the companies said today in a statement. That represents a 30 percent premium to Saks’ closing price on May 20, 2013.

When the transaction is completed, the company will operate 320 stores in North America, including two of the most iconic luxury retailers on Fifth Avenue in New York. But Lord & Taylor had lost some of its luster as part of the old May Department Store Co., and Saks has struggled – along with much of luxury retailing – in the last five years.

“This exciting portfolio of three iconic brands  creates one of North America’s premier fashion retailers,” said HBC chairman and ceo Richard Baker.

The deal ends speculation that Saks would end up in the hands of a private equity owner, like Starwood Capital Group LLC (Greenwich, Conn.) or a Middle Eastern owner, such as the Qatar Wealth Fund.