Moody's may cut Saks

Moody's Investors Service said it placed Saks Inc. Ba2 corporate family rating and Ba2-PD probability of default rating on review for downgrade.

The review for downgrade follows the announcement that Hudson's Bay Co. has agreed to purchase Saks for $16 per share or a total transaction price of about $2.9 billion, the agency noted.

At the same time, Moody's affirmed Saks' Ba3 senior unsecured notes rating.

Moody's said it views the acquisition favorably as it will combine three well regarded retail nameplates in North America, result in a sizable owned real estate portfolio, and create the opportunity for potential synergies.

The review for downgrade will focus on the capital structure being put in place to finance the acquisition including at which legal entity the debt will be raised and potential support from the parent, the agency said.

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