Saks Fifth Avenue is poised to open in Toronto as the company takes over the former Hudson Bay Company flagship store at Queen Street and Yonge Street in downtown Toronto.

An entity controlled by Hudson's Bay Chairman Richard Baker will buy the stake owned by a unit of Ontario Teachers' Pension Plan Board in the Canadian retailer, according to L&T B Cayman, a top shareholder in Hudson's Bay and a joint buyer.

The purchase of about 18 million shares at C$9.45 each by Baker's entity Rupert of the Rhine represents a premium of 28.6 percent to HBC's Thursday close, L&T B Cayman said on Thursday.

The acquired shares will represent about 9.76 percent of common shares on a non-diluted basis and 7.54 percent assuming the conversion of the outstanding convertible preferred shares of HBC into common shares, L&T B said.

Upon completion of the deal, L&T B will own about 25.03 percent of Hudson's Bay on a non-diluted basis.

HBC, the owner of the Saks Fifth Avenue luxury retailer, has embarked on a mission to boost flagging sales as it combats market share erosion by e-commerce companies including Amazon.com.

Last year, HBC formed a joint venture for its European business, sold its unprofitable online brand Gilt and had said it will close up to 10 struggling Lord & Taylor stores after selling the brand's flagship building in Manhattan.

Still for some investors, the measures have not gone far enough. Hedge fund Land & Buildings in November called for HBC to sell the Saks Fifth Avenue and Lord & Taylor brands and its 50 percent interest in the European joint venture.

Hudson's Bay CEO Helena Foulkes then said the company agrees with Land and Buildings that HBC is undervalued and that "everything is on the table in terms of increasing value for our shareholders."

Shares of the company have fallen 37 percent in the last 12 months.

Hudson's Bay and Ontario Teachers' Pension Plan Board were not immediately available for comment outside regular business hours.