Fairfax eyes up USA Toys R Us stores

Published on: 27th April 2018

Fairfax Financial Holdings’ president says its plans for Toys R Us are not limited to Canada.

Fairfax Financial Holdings’ president Paul Rivett says it is exploring options to keep a foothold in the US and elsewhere.

The Toronto-based company, whose $300m stalking horse offer for the Canadian subsidiary of the toy retailer was approved in a US court this week, is looking for stores outside of Canada it can potentially snap up.

“There’s pieces now we can invest in, pods of stores in the US, or elsewhere, and utilise the fact that they’ve got all the systems in Canada,” Paul said in an interview Thursday after Fairfax’s annual general meeting of shareholders.

A Virginia court approved the sale of Toys R Us Canada to Fairfax on Tuesday, ending the uncertainty looming the Canadian subsidiary after it filed for creditor protection in September, and the retailer’s US division sought bankruptcy protection.

Fairfax, which is involved in property and casualty insurance and reinsurance and investment, had been keeping a close eye on Toys R Us Canada but it was a call from another toy-industry figure that prompted a closer look, Paul said.

Vic Bertrand Jr., of the family who founded toy maker Mega Brands, best known for its building blocks, called Fairfax, according to Paul. Fairfax had been a key investor in the Mega Blox maker until it was sold to American industry giant Mattel in 2014.

“They said, ‘Listen, these folks at Toys R Us are saying there’s really a good viable business in Canada. Don’t let it die’… As a result of them calling us, we took another look,” Paul said.The sale is scheduled to go before Ontario Superior Court on Friday.

Fairfax has brought in a third-party to assess the Canadian subsidiary’s stores, and several located in high-density areas have “significant value that might not have been properly appreciated.”

The Canadian stores will remain open, and the profits will remain in Canada and reinvested in the business instead of being extracted out by its US parent in order to pay debtholders.


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