CashNews.co
Sleep Country Canada’s (ZZZ.TO) $1.7 billion deal to be acquired by Canadian insurance-focused conglomerate Fairfax Financial (FFH.TO) has been approved by the country’s competition watchdog, according to a press release late Monday.
The decision by the Competition Bureau gives Sleep Country shareholders the green light to vote on the plan at a special meeting scheduled for Sept. 18. The deal requires 66.67 per cent approval.
Under the agreement, Fairfax will purchase all issued and outstanding Sleep Country stock for $35 in cash per common share. The company says the offer represents a 28 per cent premium to the July 19 closing price, the trading session immediately prior to the deal’s announcement last month.
Sleep Country says the all-cash deal has the recommendation of its board, which unanimously decided it’s in the best interest of shareholders.
Sleep Country was founded in 1994 in Vancouver. The specialty retailer says it operates 305 corporate-owned stores and 19 warehouses across Canada.
The company has faced pressure in recent years as rising living costs prompt consumers to delay large purchases, like a new mattress.
At the same time, online bed-in-a-box retailers delivering mattresses to customers’ homes intensified competition in the industry. In recent years, Sleep Country acquired the online-focused brands Endy Sleep and Casper Canada for $88.7 million and $20.6 million, respectively.
Fairfax is led by Canadian billionaire businessman Prem Watsa, who is often called Canada’s Warren Buffett, in part for his focus on the insurance industry. Fairfax has invested in a wide array of Canadian companies, including BlackBerry (BB.TO)(BB) and Recipe Unlimited, owners of Swiss Chalet, Harvey’s, and The Keg.
Sleep Country faces a termination fee of $36.5 million if the deal with Fairfax does not proceed under certain circumstances.
Sleep Country’s Toronto-listed stock added 0.14 per cent to $35.02 as at 10 a.m. ET on Tuesday.
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.
Download the Yahoo Finance app, available for Apple and Android.