Consumer
Billionaire’s Bid for Canada Bookstore Chain Blasted by Analyst
- Schwartz offers to take Indigo private for about C$62 million
- Indigo shares jump as much as 57% in Toronto trading
An Indigo Books & Music Inc. store in Toronto, Ontario.
Photographer: Brent Lewin/BloombergThis article is for subscribers only.
Canadian billionaire Gerald Schwartz’s offer to take Indigo Books & Music Inc. private for about C$62 million ($46 million) is “wholly inadequate,” according to the only Bay Street analyst who still covers the retailer.
The offer of C$2.25 per share should be rejected as it ascribes “little to no value to the brand” or to the bookstore chain’s lease portfolio, Cormark Securities Inc. analyst David McFadgen said in a note Friday. The Toronto-based retailer is capable of boosting its Ebitda margin to at least 5% and may finally be starting to improve its cost structure, he said.