Indigo Books & Music Inc. has accepted to become a private company after accepting a higher offer from a holding company linked to its biggest owner.
The company says that Trilogy Retail Holdings Inc. and Trilogy Investments L.P. will pay $2.50 in cash for each share in Indigo that they don't already possess.
The Trilogy companies, which are owned by Gerald Schwartz, the husband of Indigo's CEO Heather Reisman, initially offered Indigo $2.25 per share in cash in February.
Indigo did not disclose the reason for the increased offer, but stated that the new price represents a 69 percent premium on the $1.48 share price that Indigo had when Trilogy first made its bid.
The company's shares, which revealed the agreement after the stock market closed, finished Tuesday at $2.01 on the Toronto Stock Exchange.
Indigo stated that an independent committee of its board of directors recently unanimously recommended the company accept Trilogy's latest offer.
If shareholders approve the deal in a May vote, Indigo foresees the transaction being completed in June and its shares being removed from the Toronto Stock Exchange sometime after.
“We believe that this transaction will give minority shareholders a significant premium for their shares after a few challenging years for the business, while also ensuring a strong future for Indigo under complete ownership by a team that has shown a strong commitment to Indigo's mission,” Indigo board chair Markus Dohle said in a statement.
In the last two years, Indigo faced a ransomware attack that brought down its website for a long time and the departure of several board members, including one who said she lost confidence in the board's leadership.
During these difficulties, Indigo's founder, Reisman, returned to lead the company after retiring in the summer of 2023.
Earlier this year, Indigo announced staff layoffs as part of ongoing efforts to streamline its operations.
The company stated that the layoffs were part of the business's strategic plan to make it profitable again.
Through the Trilogy firms, Schwartz has the majority of control over Indigo. He owns around 56 percent of the company's common shares, while another 4.6 percent are owned by Reisman through a different holding company.
Trilogy has stated that it has no interest in selling any of its shares.
