Toys ‘R’ Us Canadian equity sale now OK’d in United States and Canada

By Caroline Salls

Pittsburgh, April 27 – Toys “R” Us (Canada) Ltd. said Friday that it has now received both U.S. and Canadian court approval for its sale to Fairfax Financial Holdings Ltd.

According to a news release, the transaction is subject to customary closing conditions, including remaining court and applicable regulatory approvals, and is expected to close this quarter.

“We are very excited to partner with Fairfax,” Toys “R” Us and Babies “R” Us Canada president Melanie Teed-Murch said in the release.

“We are thrilled that more than 4,000 members of our team will be joining the Fairfax family, and this transaction provides stability for all of our stakeholders, including customers, suppliers and landlords.

“With this strong ownership, we will also now have the resources available to reinvigorate our stores, improve our customers’ experience and grow our market leading position.”

Fairfax chairman and chief executive officer Prem Watsa said in the release “We look forward to building for the long-term and allowing the Toys “R” Us team in Canada to re-invest in the business, instead of the past history of just sending earnings to the [United States].”

As previously reported, the base purchase price for Toys “R” Us, Inc.’s equity in Toys “R” Us (Canada) is $300 million. According to the purchase agreement, the final price will be the base price, minus an amount by which estimated closing date working capital is less than targeted working capital, plus the amount the closing date working capital is greater than the targeted working capital, plus estimated closing date cash, minus a debtor-in-possession debt closing amount, minus 5% of specified intercompany debt.

Toys “R” Us is a Wayne, N.J., toy retailer. The company filed for bankruptcy on Sept. 19, 2017 under Chapter 11 case number 17-34665.

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