Indigo shareholders vote in favour of privatization sale to companies owned

Indigo Books & Music Inc. shareholders have voted to approve a deal that will see 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 already held a 56 per cent stake in Indigo.

The Trilogy companies are owned by Gerald Schwartz, the spouse of Indigo chief executive Heather Reisman, and had 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 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 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.

Slightly more than 95 per cent of votes from shareholders represented at Monday’s meeting were in favour of accepting the deal. Out of the shareholders that were independent of Trilogy or its affiliates, just shy of 83 per cent of the votes supported the offer.

‘Bleeding cash’

The privatization allows Indigo to avoid some 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 that saw four of 10 board members depart 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.

The issues have played out as inflation and high interest rates make many Canadians think twice about opening their wallets, especially for the discretionary items Indigo is known for.

The trend cropped up particularly in the holiday season, when Indigo executives admitted they had overbought merchandise and stocked an assortment of…