Indigo Books & Music shares added more than 20% on Wednesday after the Canadian bookstore chain revealed that it has agreed to be taken private by Trilogy after the firm upped its takeover bid.
Indigo shareholders will receive C$2.50 per share in cash, a premium of 69% over the company’s closing price of C$1.48 on February 1, 2024.
It represents an 11% increase to Trilogy’s initial proposal of $2.25 per share made in February.
Shares of Indigo traded 22.4% higher at C$2.46 mid-morning on Wednesday.
Trilogy, made up of Trilogy Investments and Trilogy Retail Holdings, is controlled by Indigo board member Gerald Schwarz, the spouse of Indigo CEO Heather Reisman.
Along with its affiliates, Trilogy currently owns an approximately 60.6% stake in Indigo.
"Following careful consideration of a wide variety of factors and negotiations with Trilogy that resulted in a material increase to the price first offered to minority shareholders of Indigo, the Special Committee has determined that the transaction is in the best interests of Indigo and its minority shareholders,” Indigo board chair Markus Dohle commented.
“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."
Pending gaining shareholder approval at a special meeting to be held in May 2024 and the satisfaction of other customary conditions, the transaction is expected to close in June 2024.
Upon closing, Indigo’s shares will be delisted from the Toronto Stock Exchange (TSX).