Exterior view of the 2011 Holiday Windows at Saks on November 23, 2011 in New York City.
Lord & Taylor owner Hudson's Bay Co., is buying luxury retailer Saks for about $2.4 billion.
Hudson's Bay, which also runs some Canadian department stores, will pay $16 per share for Saks. This is a 5 percent premium to the company's Friday closing price of $15.31.
In announcing the deal Monday, the companies put the deal's total value at about $2.9 billion, including debt.
Saks' stock jumped nearly 4 percent Monday. For the latest stock price, click here.
The buyout is targeted to close before year's end. It still needs approval from Saks' shareholders. The New York-based retailer has about 150.2 million outstanding shares, according to FactSet.
The deal brings together three of the retail industry's biggest names—Lord & Taylor, Saks Fifth Avenue and Hudson's Bay, covering luxury, mid-tier and outlet retail sectors.
The combined company will operate 320 stores, including 179 full-line department stores, 72 outlet stores and 69 home stores in prime retail locations throughout the U.S. and Canada, along with three e-commerce sites.
The Associated Press contributed to this report.
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First published July 29 2013, 5:05 AM