Indigo Goes Private: Sweetened Deal Accepted

Under the terms of the agreement, Trilogy Retail Holdings Inc. and Trilogy Investments L.P. will pay $2.50 per share in cash for the remaining stake in Indigo. This comes after Trilogy initially proposed $2.25 per share in February.

The decision to increase the offer was not explicitly stated by Indigo, but the new price represents a significant 69 percent premium over the original share price of $1.48 when Trilogy first made its bid.

Following the announcement of the agreement after trading hours, Indigo’s shares closed at $2.01 on the Toronto Stock Exchange.

An independent committee of Indigo’s board of directors has unanimously recommended accepting Trilogy’s enhanced offer. If approved by shareholders in the upcoming May vote, the transaction is expected to close in June, leading to the delisting of Indigo’s shares from the Toronto Stock Exchange.

Markus Dohle, Indigo’s board chair, expressed confidence in the deal, stating, “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.”

Over the past two years, Indigo has faced considerable challenges including a ransomware attack that disrupted its website and the departure of several board members. However, with the return of founder Heather Reisman as CEO in 2023, the company has been working on strategic initiatives to streamline operations and restore profitability, including recent layoffs.

Gerald Schwartz, through the Trilogy firms, holds a controlling interest in Indigo, owning approximately 56 percent of the company’s common shares, with Reisman holding another 4.6 percent through a separate holding company. Trilogy has stated its intention to retain its shares and is not considering selling any portion of its stake.