Towards a privatization of Indigo following an improved offer

(Toronto) The Indigo Books & Music bookstore chain has agreed to be privatized after accepting an improved offer from a holding company linked to its main shareholder.


The retailer says its deal will see Trilogy Retail Holdings and Trilogy Investments LP pay $2.50 per share in cash for the stake in Indigo they don’t already own.

The Trilogy Companies, owned by Gerald Schwartz, the wife of Indigo CEO Heather Reisman, offered Indigo $2.25 per share in cash in February.

Indigo did not say what prompted Trilogy to increase its offer. The bookstore chain clarified, however, that the new price reflects a 69% premium to the $1.48 share price Indigo had when Trilogy first made its offer.

Shares of the retailer, which announced the deal after markets closed, ended Tuesday down five cents at $2.01 on the Toronto Stock Exchange.

Indigo says an independent committee of its board recently unanimously recommended that the company accept Trilogy’s latest offer.

If shareholders accept the deal in a vote in May, Indigo expects the transaction to close in June and its shares to be delisted from the Toronto Stock Exchange sometime afterward.

“We believe this transaction will provide minority shareholders with a substantial premium for their shares after difficult years for the company, while also ensuring a strong future for Indigo with full ownership by a team that has demonstrated a deep commitment to the mission of Indigo,” said Indigo Chairman of the Board of Directors Markus Dohle in a statement.

Over the past two years, Indigo has faced a ransomware attack that crippled its website for an extended period and the departure of several board members, including one who said he suffered a “loss of confidence in the leadership of the board of directors.

Amid these challenges, Indigo founder Mme Reisman, returned to the helm of the company after retiring in the summer of 2023.

Indigo announced layoffs earlier this year as part of ongoing efforts to streamline its operations.

The company said at the time that the cuts were part of its strategic plan to return the company to profitability.

Through the Trilogy Companies, Mr. Schwartz is the majority shareholder of Indigo. He owns approximately 56% of the company’s issued and outstanding common stock, while 4.6% is owned by Mme Reisman through another holding company.

Trilogy said it was not interested in selling its shares.

Company in this report: (TSX: IDG)


source site-55