Last week, Indigo Books & Music Inc., confirmed it has received an unsolicited non-binding privatization proposal.
Canada’s leading book and lifestyle retailer announced that the proposal comes from Trilogy Retail Holdings Inc. and Trilogy Investments L.P. controlled by Gerald W. Schwartz, a member of the Indigo Board.
The proposal outlines “a potential transaction to acquire all of the issued and outstanding common shares of the Company that Trilogy and its joint actors do not currently own for $2.25 in cash per common share of the Company,” said Indigo.
“Trilogy, together with its joint actors, currently own an aggregate of 16,774,665 common shares of Indigo, representing approximately 60.63 per cent of the issued and outstanding common shares of the Company (the “Common Shares”) as of the date hereof,” said Indigo in a statement.
“The Board will review the Proposal to determine the course of action that it believes is in the best interest of the Company. The Board has established a special committee of independent directors (the “Special Committee”) that will evaluate the Proposal and any viable alternatives that may be available to the Company and make recommendations to the Board. The Special Committee will supervise the preparation of a formal valuation by an independent valuator regarding the Proposal.”
Schwartz is spouse of Heather Reisman, Founder and CEO of Indigo, who also sits on the company’s board.
In its last financial results, released November 7, the company reported total revenue of $206.9 million in the its second quarter for Fiscal Year 2024, compared to revenue of $236.2 million in the same period last year, when the company achieved its highest ever merchandise sales in a second fiscal quarter.
The second quarter represented the 13-week period ended September 30, 2023 compared to the 13-week period ended October 1, 2022.
Adjusted EBITDA for the quarter was a loss of $13.8 million, compared to a loss of $10.6 million in the prior year.
In January, Indigo laid off an unspecified number of staff as part of the retailer’s ongoing efforts to streamline its operations.
Indigo spokeswoman Melissa Perri said in an email to The Canadian Press that the cuts stem from the company’s strategic plan meant to return the business to profitability.
In the past year, the retailer has dealt with a massive cyber attack as well as several executive changes.
In this video interview, George Minakakis, Founder and CEO of the Inception Retail Group, discusses the turmoil around Indigo for the past year and the recent privatization proposal.
The Video Interview Series by Retail Insider is available on YouTube.
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