Toys R Us’ Canadian operations have found a safety net months after the retailer’s demise in the US and overseas.
Documents filed in a Richmond, VA bankruptcy court have revealed the retailer will be cancelling an auction for its 82 Canadian stores and instead seeking approval to sell them to Toronto-based Fairfax Financial Holdings, which is involved in property and casualty insurance and reinsurance and investment management.
The auction was triggered by a recent $300m stalking horse offer Fairfax made that allowed others to make competing bids for the Canadian operations until Monday at 10am EST, but court filings showed no bidders other than Fairfax registered an offer.
Fairfax’s successful bid signals an end to the uncertainty that has followed the beleaguered company’s Canadian arm. Among those most upset by the company’s demise was Isaac Larian. He, along with investors he refused to identify, made a bid for the retailer’s Canadian operations, which are run separate from its US dealings, outside of the now-cancelled auction in March, calling Toys R Us’ Canadian arm a “good business.”
When rumours suggesting Isaac’s bid had been rejected started circulating last week, he at first said it was “disappointing,” but as more details about Fairfax’s bid emerged, he appeared to have taken on a new outlook.
“As long as Toys R Us and jobs are saved, I’m happy. That’s what #SaveToysRUs was and is about,” he said in a statement. In regards to Toys R Us USA, the fight to save it is just beginning.”
Fairfax has not said whether it will vie for the US operations, but the business, owned by billionaire Prem Watsa, has been on a recent spending spree.
In February, it acquired part of infrastructure services company Carillion Canada, which filed for bankruptcy protection in January, and in November, it increased its stake in Torstar media company, which holds an investment in The Canadian Press as part of a joint agreement with a subsidiary of the Globe and Mail and the parent company of Montreal’s La Presse.