Indigo Books & Music Inc. shareholders have voted to approve a deal that may see the retailer turn out to be a non-public firm.
Shareholders voted Monday in favour of a $2.50 per share provide from Trilogy Retail Holdings Inc. and Trilogy Investments L.P., which already held a 56 per cent stake in Indigo.
The Trilogy companies are owned by Gerald Schwartz, the spouse of Indigo chief government Heather Reisman, and had initially supplied $2.25 per share however 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 stated in an announcement shared with CBC News.
“We remain deeply committed to our customers and to all our stakeholders as we work together to inspire reading and enrich the lives of booklovers across the country.”
For Trilogy’s provide to be accepted, it required approval by a two-thirds majority vote of Indigo shareholders and a easy majority vote by shareholders not linked to Trilogy and its associates.
Slightly greater than 95 per cent of votes from shareholders represented at Monday’s assembly had been in favour of accepting the deal. Out of the shareholders that had been unbiased of Trilogy or its associates, simply shy of 83 per cent of the votes supported the provide.
‘Bleeding money’
The privatization permits Indigo to keep away from some scrutiny as it really works to deliver profitability and progress again to Canada’s greatest bookstore.
“The rationale is not to be saddled with public reporting responsibilities because Indigo has been through a lot,” stated Richard Leblanc, a professor of governance, regulation and ethics at York University in Toronto, in February, when the Trilogy corporations made their provide.
Trilogy now faces a hefty quantity of work.
Indigo remains to be recovering from a cyber assault that downed its web site for a prolonged interval final 12 months, a collection of quarterly losses main up to a January layoff, and a succession of modifications that noticed 4 of 10 board members depart final 12 months with one claiming mistreatment and “a loss of confidence in board leadership.”
Reisman, who retired amid the turmoil, returned inside months to helm Indigo.
The points have performed out as inflation and excessive rates of interest make many Canadians suppose twice about opening their wallets, particularly for the discretionary objects Indigo is understood for.
The pattern cropped up notably in the vacation season, when Indigo executives admitted they’d overbought merchandise and stocked an assortment of merchandise they discovered prospects weren’t on the lookout for in the ultimate weeks earlier than Christmas.
“Despite all their best efforts, they are not doing well,” Kai Li, the Canada Research Chair in company governance who teaches on the University of British Columbia, stated of Indigo in February.
“They are bleeding cash.”
Sale anticipated to shut in June
To flip issues round, Indigo has been finishing up a metamorphosis plan since not less than November. It’s supplied few specifics, however Reisman, who based the chain in 1996, has stated it’s meant to “return Indigo to both growth and profitability.”
In the months since she talked about the plan, some shops have seen wellness merchandise and the favored American Girl dolls culled from their cabinets and Columbus Cafe & Co. has moved into some Indigo areas beforehand held by Starbucks. Reisman has additionally pledged in newsletters to deliver again its digital stock search kiosks, program extra occasions and add seating to extra shops.
Trilogy hasn’t stated a lot about its plans for Indigo past it wanting to take the corporate personal, however no public opposition to the deal has mounted, probably as a result of the cash supplied mirrored a 69 per cent premium on the share value of $1.48 that Indigo had when Trilogy first made its bid.
Indigo’s share value sat at $2.48 forward of the Monday vote.
Last month, the provide garnered the assist from a particular committee of unbiased administrators Indigo fashioned to assess the deal.
Earlier this month, Indigo additionally stated that main unbiased proxy advisory corporations Institutional Shareholder Services and Glass Lewis had beneficial shareholders approve the deal.
Indigo has stated it expects the transaction to shut in June and its shares to be delisted from the Toronto Stock Exchange someday after.