Indigo investors back bid to go private
• Indigo Books & Music Inc. shareholders have voted to approve a deal that will see the retailer become a private company.
Shareholders voted Monday in favour of a $2.50 per share offer from Trilogy Retail Holdings Inc. and Trilogy Investments LP, which have a 56 per cent stake in Indigo and are owned by Gerald Schwartz, the spouse of Indigo chief executive Heather Reisman.
The Trilogy companies originally offered $2.25 per share, but raised their bid in April.
“We are pleased with the result of today’s vote and look forward to continuing our work on Indigo’s transformation strategy,” Reisman said in a statement after the vote.
Indigo spokesperson Madison Downey said in an email to The Canadian Press that Trilogy would not be commenting on the vote.
For Trilogy’s offer to be accepted, it required approval by a two-thirds majority vote of Indigo shareholders and a simple majority vote by shareholders not linked to Trilogy and its affiliates.
Some 95.09 per cent of votes from shareholders represented at the meeting Monday were in favour of accepting the deal. Just shy of 83 per cent of the votes from shareholders not linked to Trilogy and affiliates were in support of the offer.
The privatization allows Indigo to avoid some scrutiny as it works to bring profitability and growth back to Canada’s biggest bookstore.
“The rationale is not to be saddled with public reporting responsibilities because Indigo has been through a lot,” said Richard Leblanc, a professor of governance, law and ethics at York University in Toronto, in February, when the Trilogy firms made their offer.
Trilogy now faces a hefty amount of work.
Indigo is still recovering from a cyberattack that downed its website for a lengthy period last year, a series of quarterly losses leading up to a January layoff and a succession of changes as four of 10 board members departed last year, with one claiming mistreatment and “a loss of confidence in board leadership.”
The issues have played out as inflation and high interest rates make many Canadians think twice about opening their wallets, especially for the discretionary items Indigo is known for.
Given all the issues Indigo has faced, privatization “may be the shakeup Indigo needs,” Liza Amlani, principal and founder at the Retail Strategy Group consulting firm, said in an email.
Now that it has shareholder approval, Indigo said it will seek a final order from the Ontario Superior Court of Justice on Thursday and expects the deal to take effect on Friday.
It anticipates its shares will be delisted from the Toronto Stock Exchange sometime after.
FOR FOUR MONTHS IN A ROW, WE’VE SEEN ENCOURAGING INFLATION NUMBERS; (AND) FOR FOUR MONTHS IN A ROW, INFLATION HAS BEEN WITHIN THE BANK OF CANADA’S TARGET RANGE. — CHRYSTIA FREELAND, DEPUTY PRIME MINISTER