The Daily Chase: Indigo goes private, Lightspeed layoffs
Here are five things you need to know this morning:
Indigo set to go private: Retailer Indigo will soon be taken private after the board has agreed to a sweetened takeover offer from its largest shareholder. A holding company controlled by Onex chairman Gerry Schwartz offered $2.25 per share for the company earlier this year, and in a news release on Wednesday morning, the company’s board says it has agreed to accept a slightly higher offer of $2.50 per share. Schwartz is the husband of Indigo founder and CEO Heather Reisman. The takeover price is about a 69-per-cent premium to the $1.48 the shares were trading at before news of an offer emerged in February, but still down sharply from the $19 or so that they were worth prior to the pandemic.
Short seller targets WSP: A prominent U.S. short seller is aiming at TSX-listed WSP Global Inc., alleging that the Quebec-based engineering and consulting firm is overvalued by as much as 50 per cent. Spruce Point Capital, which has previously targeted Canadian companies such as Nuvei, Lightspeed and Saputo, takes issues with the company’s finances in a 68-page report published this morning, alleging it has embellished its underlying financial performance in several ways. WSP shares have gained about 20 per cent so far this year, but Spruce Point says the stock is overvalued by between 25 and 50 per cent. We’ll interview the author of the report, Ben Axler, on the air in the 9 a.m. hour on BNN Bloomberg’s The Open this morning, and we’ve reached out to the company for their side of things.
Disney proxy fight coming to a head: It’s a big day in the simmering fight behind the scenes at Disney, where a battle for control of the entertainment colossus is nearing resolution. The company is having its annual general meeting today, and one of the items on the agenda will be a vote on the composition of the board. Activist shareholder Nelson Peltz says the current board is on the wrong track, and is nominating himself and some associates for a seat at the table. Long-time CEO Bob Iger returned to the company last fall, and among other issues, Peltz says he’s dissatisfied with the company’s succession plan. The shares were a laggard for most of 2023 before rebounding by more than a third since the Peltz campaign started last fall.
Warm winter cools output at Taiga: The comparatively mild winter Canadians just endured was a factor in Quebec-based electric snowmobile company Taiga’s decision to temporarily pause production and cut its workforce by approximately 70 people, Bloomberg reports. In a release Wednesday, the company says it produced more than 1,000 vehicles last year, but still isn’t making money. Its annual net loss widened to $72 million from $59 million the year before. The job cuts come after the company already cut 30 jobs in January. The company has declined to offer any specific details on its current staffing levels.
Lightspeed cutting jobs, planning stock buyback: Quebec-based payment firm Lightspeed says it plans to cut 280 jobs, or about 10 per cent of its workforce, in a move that the company says is part of its growth strategy. In addition to the job cuts, the company says it plans to buy back as much as 10 per cent of its shares, or roughly $140 million, in a bid to improve its financial performance and boost the share price.