Indigo Books & Music Inc., Canada’s top book and lifestyle retailer, announced Monday it has reached a definitive agreement with Trilogy Investments L.P. and Trilogy Retail Holdings Inc., controlled by board member Gerald W. Schwartz, to be acquired for $2.50 per share in cash.
This deal marks a significant premium over Indigo’s recent stock prices, offering shareholders a 69% increase over the February 1 closing price and a 56% premium over the 20-day volume weighted average price.
The transaction, valued based on the unanimous recommendation of an independent board committee, aims to provide immediate and certain cash value to Indigo’s minority shareholders, subject to shareholder and court approval. Trilogy currently owns approximately 60.6% of Indigo’s shares.
Following negotiations after a non-binding initial offer made public on February 1, the purchase price was increased from the original proposal of $2.25 per share to $2.50, reflecting an 11% hike in consideration for minority shareholders.
Markus Dohle, Chair of the Board and of the Special Committee, emphasized the transaction’s benefits for minority shareholders and the company’s future.
BMO Capital Markets, serving as the independent valuator, has delivered a fairness opinion stating the transaction is financially fair to minority shareholders, with the fair market value of Indigo’s shares estimated between $1.90 and $2.90.
The acquisition will be executed via a court-approved plan of arrangement and is expected to be finalized in June 2024, following a special shareholder meeting scheduled for May.
Upon completion, Indigo’s shares will be delisted from the Toronto Stock Exchange, and the company will cease to be a reporting issuer.
Indigo’s management and independent directors have agreed to vote in favor of the transaction, which is not contingent on financing.
Legal advisories for the transaction include Blake, Cassels & Graydon LLP for the Special Committee, Torys LLP for Indigo, and Osler, Hoskin & Harcourt LLP for Trilogy.
The arrangement is set to conclude Indigo’s public company status, transitioning it to private ownership under Trilogy, and aims to strengthen its mission and leadership in the Canadian bookselling and publishing industry.
BusinessNewsCanada.com