‘End of an era’ for Gendis Inc.

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This article was published 27/12/2017 (2839 days ago), so information in it may no longer be current.

Gendis Inc., the company founded by Albert Cohen and his five brothers in the 1940s that introduced Sony transistor radios to the Canadian market and owned hundreds of discount clothing stores in small towns across the country, will become a private company owned by third-generation Cohen siblings.

“You could say it’s the end of an era,” said Jerry Gray, an independent board member of Gendis Inc.

The children of Albert Cohen, led by James Cohen who has been the CEO of the company since 2010, are offering $5.25 per share to take the company private.

The Cohen siblings currently own close to 73 per cent of the 13 million outstanding shares of publicly traded Gendis Inc.

Another minority shareholder representing 15 per cent of the shares has already agreed to sell their shares to the Cohen siblings.

Since the company unloaded its struggling, small-town discount clothing retail chains — Saan Stores — in 2005, it has existed as a holding company of sorts for a small portfolio of real estate assets — including the 500,000-square-foot facility on Sony Place that once operated as the distribution centre for its retail chain of 350 stores — as well as shares in oil and gas companies and some agri-tech companies.

Last year, the company had $5.4 million in revenue with total assets of $67 million.

“We have been looking at this (a going private transaction) for several years,” Gray said.

“Operating as a public company can be quite costly and you have to be ready to use the capital market for your own advantage.

“In our case, the situation just was not right to do a lot of investing or issuing new stock. It was decided it was best in the interest of all shareholders to be a private company.”

The $5.25-per-share offer, which is subject to a number of conditions before it closes, represents a 12.9 per cent increase from the original offer of $4.65 per share made in early November.

Over the past few years Gendis’s asset mix has changed only slightly, with modest investments in a couple of new agri-tech companies.

Its most significant holding — about two million shares of Veresen Inc. — received a windfall in October when Veresen was acquired by Pembina Pipeline Corp.

As a result of that transaction, Gendis received $12.9 million in cash and 561,725 shares in Pembina Pipeline that were worth $24 million at the time (worth $25.56 million on Wednesday).

In addition to Veresen (now Pembina Pipeline), Gendis holds 1,586,000 shares worth about $2.7 million as of Oct. 31 in Osum Oil Sands Corp., a private Alberta oilsands company.

The large Sony Place industrial property is now leased up to 100 per cent after suffering the loss of a major tenant a couple of years ago when IMRIS Inc. pulled up stakes and moved to Minneapolis.

Gendis also owns five other commercial real estate properties that all once housed Saan or other former Gendis-owned retail stores. Those buildings are located in Flin Flon, Stonewall, Portage la Prairie, Winnipeg and Thunder Bay.

The share offer will be subject to the approval of not less than a majority of the votes of the shares not owned by James Cohen and his siblings, Anna-Lisa Cohen and Anthony Cohen.

A formal takeover bid circular is to be sent to shareholders of Gendis no later than Jan. 18, 2017, and a shareholder meeting will be held soon after to finalize the transaction.

martin.cash@freepress.mb.ca