Indigo ready to go private

Photo: The Canadian Press

TORONTO — Indigo Books & Music Inc. shareholders have voted to approve a deal that will have the retailer become a private company.

Shareholders voted Monday in favour of a $2.50 per share offer from Trilogy Retail Holdings Inc. and Trilogy Investments L.P., which have a 56% stake in Indigo and are owned by Gerald Schwartz, the spouse of Indigo chief executive Heather Reisman.

The Trilogy companies originally offered $2.25 per share but 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 said in a statement following the vote.

“We remain deeply committed to our customers and to all our stakeholders as we work together to inspire reading and enrich the lives of book lovers across the country.”

Indigo spokesperson Madison Downey said in an email to The Canadian Press that Trilogy would not be commenting on the vote.

For Trilogy’s offer to be accepted, it required approval by a two-thirds majority vote of Indigo shareholders and a simple majority vote by shareholders not linked to Trilogy and its affiliates.

Some 95.09% of votes from shareholders represented at the meeting Monday were in favour of accepting the deal. Just shy of 83% of the votes from shareholders not linked to Trilogy and affiliates were in support of the offer.

The privatization allows Indigo to avoid scrutiny as it works to bring profitability and growth back to Canada’s biggest bookstore.

“The rationale is not to be saddled with public reporting responsibilities, because Indigo has been through a lot,” said Richard Leblanc, a professor of governance, law and ethics at York University in Toronto, in February, when the Trilogy firms made their offer.

Trilogy now faces a hefty amount of work.

Indigo is still recovering from a cyber attack that downed its website for a lengthy period last year, a series of quarterly losses leading up to a January layoff, and a succession of changes during which four of 10 board members departed last year, with one claiming mistreatment and “a loss of confidence in board leadership.”

Reisman, who retired amid the turmoil, returned within months to helm Indigo.