Indigo Books & Music, Canada's troubled largest bookseller, has agreed to accept an offer of C$2.50 per share from Trilogy Investments L.P. and Trilogy Retail Holdings Inc., a move that will take the company private once the transaction is approved by all shareholders. The offer comes nearly two months after the same parties made an offer to acquire all outstanding shares at C$2.25 per share. The Trilogy firms—which are controlled by Canadian billionaire Gerald Schwartz, an Indigo board member and the husband of Indigo founder and CEO Heather Reisman—already own 60.6% of all of Indigo’s shares.
The sweetened offer of C$2.50 share is a 69% premium over the closing price of C$1.48 per share listedon the Toronto Stock Exchange February 1, the last trading day prior to the public announcement of the initial offer of C$2.25 per share. The retailer's stock price has endured a long slump, selling at times below C$2.00 per share over the last year, as it struggles to return to profitability following the negative impact of the pandemic and a cyberattack that crippled its business.
Markus Dohle, former Penguin Random House CEO who joined the Indigo board in 2023 and chairs the special committee overseeing the transaction, called the offer a fair one. "Following careful consideration of a wide variety of factors and negotiations with Trilogy that resulted in a material increase to the price first offered to minority shareholders of Indigo, the special committee has determined that the transaction is in the best interests of Indigo and its minority shareholders," Dohle said in a statement.
Indigo's financial troubles continued into 2024. For the first six months of Indigo’s current fiscal year, which ends in March, sales fell 12.3%, to C$386 million, and its net loss increased to C$50.9 million, from C$41.3 million in the first half of fiscal 2023. In an interview Reisman gave to Bloomberg when those results were released, she acknowledged that taking Indigo’s focus away from books to include more general merchandise was a mistake, and that the company was renewing its commitment to books.
The buyout offer is expected to close by June, at which time Indigo will be delisted from the Toronto Stock Exchange. By taking Indigo private, the company will be relieved from the pressure to meet the demands of financial analysts, as well as reduce the costs and financial requirements required of a publicly-traded company. The move will also dramatically reduce transparency about Indigo's finances, as the bookstore will no longer be required to make its financial statements public.