Indigo Books & Music Inc. has agreed to be taken private by Trilogy Retail Holdings Inc. and Trilogy Investments L.P., both connected to its largest shareholder, Gerald Schwartz. The agreement will see Trilogy pay $2.50 per share in cash for the stake in Indigo that they do not already own, a sweetened offer from the initial $2.25 per share in cash offered in February. This new price reflects a 69 percent premium on the share price of $1.48 that Indigo had when Trilogy first made its bid. The agreement was announced after the close of trading, with shares ending at $2.01 on the Toronto Stock Exchange.
An independent committee of Indigo’s board of directors recently recommended accepting Trilogy’s latest offer, and a shareholder vote is expected in May. If approved, the transaction is set to close in June, after which Indigo’s shares will be delisted from the Toronto Stock Exchange. Markus Dohle, Indigo’s board chair, believes that this transaction provides minority shareholders with a substantial premium following challenging years for the company. The deal ensures a strong future for Indigo under full ownership by a team committed to its mission.
Indigo has faced challenges in recent years, including a ransomware attack that disrupted its website and the departure of several board members. Indigo founder Heather Reisman returned to lead the company after retiring in the summer of 2023. Layoffs were announced earlier this year as part of efforts to streamline operations and return the business to profitability. Schwartz, the controlling shareholder of Indigo through Trilogy, owns around 56 percent of the company’s issued and outstanding common shares, with an additional 4.6 percent owned by Reisman through a separate holding company. Trilogy has stated that they are not interested in selling any of their shares.
The agreement with Trilogy Retail Holdings Inc. and Trilogy Investments L.P. marks a significant development for Indigo Books & Music Inc. As the company prepares to go private, shareholders will have the opportunity to vote on the deal in May, with a closing expected in June. The transaction, if approved, will provide minority shareholders with a substantial premium for their shares, while also ensuring a strong future for Indigo under full ownership by a committed team. These changes come amidst challenges such as a ransomware attack, board member departures, and leadership changes at Indigo.
The retail industry has been undergoing significant transformations, with companies like Indigo needing to adapt to changing consumer preferences and market dynamics. By going private, Indigo may have increased flexibility to make strategic decisions and navigate the evolving retail landscape. The leadership of Heather Reisman and the support of Trilogy Retail Holdings Inc. and Trilogy Investments L.P. will be crucial in guiding Indigo through this transition and positioning the company for future success. It remains to be seen how this privatization will impact Indigo’s operations, strategy, and overall performance in the coming years.
Overall, the agreement for Indigo to be taken private by Trilogy represents a new chapter in the company’s history. With a focus on shareholder value and a commitment to the company’s mission, the deal is expected to benefit all parties involved. The challenges faced by Indigo in recent years have set the stage for this transition, and the support of Trilogy’s ownership will be instrumental in shaping Indigo’s future direction. The upcoming shareholder vote will be a key milestone in this process, determining the final outcome of Indigo’s privatization and setting the stage for the company’s next phase of growth and development.
