The fight over the privatization of Hudson’s Bay Co. (HBC.TO) is back before the Ontario Securities Commission on Wednesday.

On one side is Catalyst Capital Group, which filed a complaint with the OSC after its $11 per share offer to take the company private was rejected by HBC’s special committee. The HBC panel was tasked with analyzing potential privatization bids.

On the other side is HBC and a group of majority shareholders led by executive chairman Richard Baker, which has offered to take the company private at $10.30 per share. The majority shareholder group has accused Catalyst of intending to mislead minority shareholders and manipulating the market.

Catalyst, a private investment firm, is seeking to ban the Baker group from acquiring the retailer. Alternatively, it wants to force HBC to amend its management circular document which it claims had “numerous omissions and misrepresentations” and to postpone a meeting to vote on the privatization.

Lawyers representing the Baker group argued before the OSC at a scheduling meeting last week that Catalyst did not have standing to bring forward the complaint and that the commission was “being co-opted” in an attempt to stall the shareholder vote.

“They are clearly trying to suppress the vote in support of this transaction,” Eliot Kolers, a lawyer representing the Baker group, said at the hearing last Thursday.

OSC vice-chair D. Grant Vingoe will consider whether Catalyst has standing on Wednesday morning. If he finds the investment firm does, the hearings could continue through to Friday, the same day of the proxy voting deadline.

The OSC proceeding comes less than a week before the special shareholder meeting to vote on the Baker group’s privatization bid.

A war of words

In the lead-up to the vote, both the Baker group and Catalyst have been engaged in a war of words.

In a letter sent to HBC’s special committee, the Baker group said Catalyst “is not a credible party.”

“We believe that the Catalyst Announcement is an illusory offer, intended to mislead minority shareholders, manipulate the market, and would only serve to frustrate the opportunity for minority shareholders to receive premium cash consideration for their shares,” Baker said.

“As is widely reported, Catalyst has a track record of failing to execute on its promises and of engaging in conduct that is viewed critically by many participants in the capital markets.”

Catalyst released a statement Saturday, shortly after Institutional Shareholder Services advised HBC shareholders to vote against the Baker group proposal, saying it is concerned with “the questions that remain unanswered” in regards to the privatization process.

"Catalyst has been working to protect the interests of the minority shareholders, including offering all shareholders a superior proposal to the Baker Group,” Catalyst managing director Gabriel de Alba said in a statement.

“We will continue to push the HBC independent directors to finally step up and do their duty to protect shareholders, run a true value maximization process and restrict the coercive and questionable efforts of Richard Baker."

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