Austrian firm makes bid for HBC's Galeria Kaufhof of Germany

Shares of Hudson's Bay Co. jumped Wednesday on news that Austrian firm Signa Holding made a 3 billion euro ($4.5 billion Cdn) bid for HBC's German department store chain Galeria Kaufhof.

Reuters initially reported the bid Wednesday, citing unnamed sources. Signais the parent company of Karstadt, another German department store chain that is a chief competitor to Kaufhof.

Investors responded by sending HBCshares up more thannine per cent to close at$12.29on the TSX.

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HBCconfirmedit has received an "incomplete, non-bindingand unsolicited offer" fromSignato acquireKaufhofand other real estate assets.HBCsaid its board intends to review the offer.

"As we've previously stated, our European business is an important element of the company's strategy,"HBCsaid, adding that remains focussed on the upcoming holiday season.

HBCacquired 103Kaufhofstores andBelgian subsidiary Inno in 2015 in a $3.9 billion deal.

In early September of this year,HBCindicated that it wasn't interested in sellingKaufhofamid reports thatSignawas considering a bid for the German chain.

Word of the bidcomes as HBChas been working on selling off some of its North American real estate holdings.

On Oct. 24, HBC said it had struck a deal to sell Lord & Taylor's flagship store in New York for $1 billion to office-sharing company WeWork, which will move into some space in the retailer's other properties.

Earlier this week, HBCalso said it was eyeing the sale of its flagship store in Vancouver.

Pushed by activist investor

The real estate moves come after a minority shareholder, Land & Buildings Investment Management, put pressure on the retailer to monetize its holdings.

In a letter Wednesday to shareholders,Land & Buildings said the company should "seriously consider" the bid forKaufhof.

"Selling properties at or above the company's stated (net assetvalue) is likely the optimal and lowest cost option for raisingcapital -- and further underscores the real estate value of thecompany," the letter says.

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In addition, Wednesday marked the departure date of HBCCEO Jerry Storch. The company announced on Oct. 20 that Storch was leaving HBC to return to hisfirm, Storch Advisors.

Richard Baker, HBC's governor and executive chairman, who had previously served as CEO, reassumed the role while the company conducts a search for a new top executive.