The Reject Shop has entered an acquisition agreement with Canadian convenience chain Dollarama in a deal that values the Australian company at $259 million.
The Reject Shop Board unanimously recommends that shareholders vote in favour of the scheme, with the acquisition price of $6.68 cash per share representing a 112 per cent premium to the closing share price of $3.15 on March 26.
“Today marks a milestone in the journey of The Reject Shop,” The Reject Shop chairman, Steven Fisher, said in a statement.
“Attracting an offer from Dollarama, a recognised leader in the value retail market, is testament to both the meaningful improvement that our incredible team has made to our business over the past few years as well as the significant growth potential that exists for The Reject Shop,” he continued.
“The all-cash Scheme Consideration provides attractive value and certainty for all shareholders. The Board believes the proposed transaction will benefit both shareholders and stakeholders of The Reject Shop and is in line with the Board’s priority to deliver shareholder value.”
A successful acquisition of The Reject Shop by Dollarama would allow the Canadian chain to continue its international expansion.
“Identifying the right opportunity to expand into new geographies and build on our track record as a leading value retailer in Canada and Latin America has been a key objective for the Dollarama team,” Dollarama CEO, Neil Rossy, said in a statement.
“With this acquisition, we have a unique and compelling opportunity to bring our differentiated value proposition to a new market which presents a clear path for growth through an established platform,” he continued.
Last month, The Reject Shop reported double-digit profit growth as sales improved.
