Indigo Books and Music Inc T.IDG

Cormark summary

[Possibleidiot01]

 

Indigo Books & Music Inc. (IDG - TSX)

Privatization Proposal Is Wholly Inadequate

IDG issued a press release last night stating that it has received a non-binding proposal from Trilogy Retail Holdings Inc. (TRHI) and Trilogy Investments L.P. (TLIP) to acquire all of the common shares that TRHI and TLIP do not currently own for $2.25/sh in cash. Together, TRHI and TLIP own approximately 16.8 MM shares, representing 60.6% of the shares outstanding. TRHI and TLIP are controlled by Mr. Gerald W. Schwartz, a member of IDG’s board of directors. In our opinion, this offer is wholly inadequate, and it should be rejected. We rate IDG a Buy (S) with a target of $3.40.

 

[2young2invest]

Looks like Cormark or their clients are underwater. $2.25 is a very good offer, company worth zero: negative equity, no real assets and it barely made any money during Christmas season, the rest of the year will see huge loses.

[Possibleidiot01]

I've very seldom seen analysts come out this strongly against buyout offers. People seldom make offers unless it benefits them. Since then Cormark has walked the price back to $3.20 but, they have given a few reasons why the offer is inadequate ; in the last report they said with cash on the books and the proceeds of the cyber attack insurance ( $1.3 million so far,  estimate of $10

[2young2invest]

They could pay more than $25m? Yes, but why? Company's liabilities are higher than their assets. The big discounts were because no one had enough disposable income to spend. IDG is not an IT company and someone hacked their website. Taking a proven and secure solution like Shopify is easier and faster for them than trying to find the problem. Cormark is udnerwater, that is their only reason

[Possibleidiot01]

In the end , shareholders get 25 cents more or about $3-4 million more than the original offer.

[2young2invest]

Yep, a nice suprise! Too bad I couldn't accumulate more shares.