Indigo agrees to go private after sale to holding company owned by chief executive’s spouse

Indigo Books & Music Inc. has agreed to be taken private after agreeing to a sweetened offer from a holding company connected to its largest shareholder.

The retailer says its agreement will see Trilogy Retail Holdings Inc. and Trilogy Investments L.P. pay $2.50 per share in cash for the stake in Indigo they do not already own.

The Trilogy companies, owned by Gerald Schwartz, the spouse of Indigo chief executive Heather Reisman, offered Indigo $2.25 per share in cash in February.

Indigo did not say what caused Trilogy to boost its offer but noted the new price reflects a 69 per cent premium on the share price of $1.48 that Indigo had when Trilogy first made its bid.

Indigo says an independent committee of its board of directors recently unanimously recommended the company accept Trilogy’s latest offer.

‘Challenging years for the business’

If shareholders agree to the deal during a May vote, Indigo expects the transaction to close in June and its shares to be delisted from the Toronto Stock Exchange sometime after.

“We believe that this transaction will provide minority shareholders with a substantial premium for their shares following some challenging years for the business, while also ensuring a strong future for Indigo with full ownership by a team that has demonstrated a deep commitment to Indigo’s mission,” Indigo board chair Markus Dohle said in a statement.

Indigo employees worried about identity theft after data breach

The personal information of current and former Indigo employees was stolen in a cyberattack. There is no evidence the data has been released, despite claims it has, but experts say the risk is not gone.

The last two years have seen Indigo encounter a ransomware attack that downed its website for a lengthy period and the departure of several board members, including one who said she experienced a “loss of confidence in board leadership.”

Amid these challenges, Indigo’s founder, Reisman, returned to the company’s helm after retiring in the summer of 2023.

Indigo announced layoffs earlier this year as part of ongoing efforts to streamline its operations.

The company said at the time that the cuts were part of its strategic plan, and were meant to return the business to profitability.

Through the Trilogy firms, Schwartz is the controlling shareholder of Indigo. He owns around 56 per cent of the company’s issued and outstanding common shares, while another 4.6 per cent belong to Reisman through a different holding company.

Trilogy has said it’s not interested in selling any of its shares.