Schwartz and Reisman propose to take Indigo Books & Music private for $25.6M

CPE News

CPE News (2.1.2024) – Trilogy Retail Holdings Inc. and Trilogy Investments L.P. (together Trilogy) have made a non-binding privatization proposal to Indigo Books & Music Inc. (TSX: IDG) to acquire all of the common shares of Indigo not already owned or controlled by Trilogy and its joint actors at a price of $2.25 in cash per share.

Trilogy Retail Holdings Inc. and Trilogy Investments L.P. are personal holding companies of Gerald W. Schwartz, a director of Indigo and, indirectly, the controlling shareholder of Indigo.

As of the date hereof, Trilogy has ownership and control over an aggregate of 15,501,974 common shares of Indigo, representing approximately 56% of the issued and outstanding common shares, and Trilogy, together with its joint actors, including HRON Canadian Investments Ltd., the personal holding company of Heather M. Reisman, CEO of Indigo, have ownership and control over an aggregate of 16,774,665 common shares of Indigo, representing approximately 60.6% of the issued and outstanding common shares.

As at September 30, 2023, Indigo Books & Music had 27,666,558 common shares issued and outstanding.

The proposal would value Indigo’s minority shareholding at approximately $25.6 million on fully diluted basis.

photo credit: Indigo Books & Music

News Release

TRILOGY ANNOUNCES INDIGO PRIVATIZATION PROPOSAL

TORONTO, ON, February 1, 2024 – Trilogy Retail Holdings Inc. (“TRHI”) and Trilogy Investments L.P. (“TILP”) (together, “Trilogy”) announced today that Trilogy has made a non-binding privatization proposal to Indigo Books & Music Inc. (TSX: IDG) (“Indigo”) to acquire all of the common shares of Indigo not already owned or controlled by Trilogy and its joint actors at a price of $2.25 in cash per share. TRHI and TILP are personal holding companies of Mr. Gerald W. Schwartz, a director of Indigo and, indirectly, the controlling shareholder of Indigo.

The proposal represents a premium of 50% over Indigo’s closing price on the Toronto Stock Exchange (“TSX”) on January 31, 2024, and a premium of 46% and 40%, respectively, over the 10-day and 20-day average closing prices on the TSX.

As of the date hereof, Trilogy has ownership and control over an aggregate of 15,501,974 common shares of Indigo, representing approximately 56% of the issued and outstanding common shares, and Trilogy, together with its joint actors, including HRON Canadian Investments Ltd., the personal holding company of Ms. Heather M. Reisman, Chief Executive Officer of Indigo, have ownership and control over an aggregate of 16,774,665 common shares of Indigo, representing approximately 60.6% of the issued and outstanding common shares.

Assuming the completion of the transaction contemplated by the privatization proposal, Trilogy and its joint actors intend to cause the common shares of Indigo to cease to be listed on the TSX and to cause Indigo to apply to cease to be a reporting issuer under applicable Canadian securities laws, and to otherwise terminate Indigo’s public reporting requirements.

Trilogy’s proposal to Indigo contemplates that the privatization proposal is the only transaction Trilogy is prepared to pursue. Accordingly, Trilogy is not interested in supporting any process in furtherance of an alternative change of control transaction and is not prepared to sell its shares.

An early warning report will be filed in accordance with applicable securities laws and will be available on Indigo’s SEDAR+ profile at www.sedarplus.ca. To obtain a copy of the early warning report, please contact Trilogy, 161 Bay Street, 49th Floor, Toronto, ON, M5J 2S1, Attention Lori Shapiro, 416-362-7711.

Indigo’s head office is located at 620 King Street West, Suite 400, Toronto, ON, M5V 1M6.

This announcement is for informational purposes only and does not constitute an offer to purchase or a solicitation to sell common shares of Indigo.

Forward Looking Statements

Certain statements made in this news release are forward-looking statements within the meaning of applicable securities laws, including, but not limited to, statements with respect to the privatization proposal, the terms and conditions of the privatization proposal, and future discussions with Indigo’s board of directors, special committee of independent directors, and their advisors regarding the privatization proposal. Often but not always, forward-looking statements can be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “believe”, “estimate”, “plan”, “could”, “should”, “would”, “intend”, “outlook”, “anticipate”, “foresee”, “continue” or the negative of these terms or variations of them or similar terminology. Although Trilogy believes the forward-looking statements in this news release are based on information and assumptions that are current, reasonable and complete, these statements are by their nature subject to a number of factors that could cause actual results to differ materially from their expectations and plans, including, without limitation, the following factors, many of which are beyond Trilogy’s control and the effects of which can be difficult to predict: (a) the possibility that Indigo, its board- 2 – of directors, its special committee and Trilogy cannot reach agreement on the privatization proposal or will not proceed with giving shareholders an opportunity to accept or vote in favour of the privatization proposal; (b) the possibility that the terms and conditions of the privatization proposal will differ from those that are currently contemplated; (c) the failure to obtain or satisfy, in a timely manner or otherwise, required shareholder approvals and other conditions of closing necessary to complete the privatization proposal; (d) the risks and challenges facing Indigo including those set forth in the “Risk Factors” section of Indigo’s Annual Information Form dated June 27, 2023 as well as Indigo’s other public filings, available at www.sedarplus.ca and at www.indigo.ca; and (e) other risks and/or factors beyond its control which could have a material adverse effect on Indigo or the ability to consummate the privatization proposal. The forward-looking statements contained in this news release describe Trilogy’s expectations at the date of this news release and, accordingly, are subject to change after such date. Trilogy does not undertake any obligation to update or revise any forward-looking statements contained in this news release, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on these forward-looking statements.