BRANTFORD, Ont. — Stock in Liquidation World Inc. (TSX:LQW) plummeted more than 40 per cent Thursday after the company announced it would be acquired by U.S.-based closeout retailer Big Lots Inc. (NYSE:BIG) for $1.8 million plus debt.
In early trading, Liquidation stock was down 4.5 cents, or 40.91 per cent, at 6.5 cents on the Toronto Stock Exchange with trading volume of almost 300,000 shares.
The transaction will have Big Lot pay six cents for each of Liquidation World’s 29.86 million shares, as well as an agreement to “satisfy all of the outstanding funded indebtedness of the company, including such indebtedness owing to the company’s senior lenders, senior noteholders and junior noteholders.”
A special committee of Liquidation World’s board of directors has recommended that the full board approve the offer.
In addition, the directors, senior officers and certain other shareholders of the company representing 40 per cent of all shares have entered into support agreements with Big Lots, based in Columbus, Ohio.
The offer is expected to close by July 31.
Based in Brantford, Ont., Liquidation World is Canada’s largest operator of closeout retail stores, operating 92 stores in Canada with some 1,200 employees. It opened a store in Red Deer under the company’s new “LW — Everbody’s Outlet Store” brand in March, after being absent from the city for five years.