The Indigo bookstore chain will become a private company

The Indigo bookstore chain will become a private company
The Indigo bookstore chain will become a private company

Shareholders of the country’s largest bookstore chain, Indigo Books & Music, accepted an agreement Monday morning at a special meeting that will see the Ontario company transformed into a private company.

At the end of the transaction, Trilogy Retail Holdings And Trilogy Investments – which belong to Gerald Schwartzthe husband of the founder of Indigo, Heather Reisman – will pay $2.50 per share in cash to shareholders and become owners of the company.

We are pleased with the outcome of today’s vote and look forward to continuing our work on Indigo’s transformation strategydeclared Ms. Reisman, president of Indigo, in writing after the vote.

We remain deeply committed to our customers and to all our stakeholders, as we work together to inspire reading and enrich the lives of book lovers across the countryshe added.

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Heather Reisman founded Indigo in 1996.

Photo: The Canadian Press / Chris Young

The agreement received the support of nearly 83% of Indigo shareholders, excluding holding companies Trilogy.

The latter, who held more than half of the shares in the bookstore chain, made an initial offer of $2.25 per share in February before increasing it in April.

An independent committee formed by Indigo to evaluate the offer had recommended that shareholders accept the deal. This was also approved by the Ontario Superior Court of Justice last month.

At the sale price of $2.50 per share, shareholders will receive a premium of nearly 70% over Indigo’s stock price when the first offer was filed in February. This amount, however, remains well below the $20 per share that the company was worth in 2018 before experiencing a series of financial setbacks.

Last year, a cybersecurity incident crippled Indigo’s website and electronic payment system, a situation that led to the departure of four of its ten directors.

Heather Reisman returned to the helm of Indigo in September, just months after retiring, to try to turn the company around. Indigo notably announced layoffs in January in order to return to profitability.

According to Maher Kooli, full professor of finance at the School of Management Sciences at theUQAMclosing Indigo’s capital will allow the company to focus on its long-term objectives without having to worry about shareholders’ short-term profitability expectations.

The agreement should thus give much more freedom and room for maneuver for managers [de l’entreprise]adds Mr. Kooli.

Indigo expects the transaction to close in June and its shares to be delisted from the Toronto Stock Exchange shortly thereafter.

With information from The Canadian Press, Marjorie April and Philippe de Montigny

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