Kobo sold to Japan's Rakuten for $315 million

TORONTO Tue Nov 8, 2011 6:05pm EST

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TORONTO (Reuters) - Japan's Rakuten Inc and spun off in late 2009. Indigo is still Kobo's majority shareholder and said it expects to get about $140 million to $150 million from the sale.

The Japanese Internet services and e-commerce company intends to acquire all issued and outstanding shares of Kobo for cash.

Kobo's services are available on Kobo-branded e-readers as well as other devices, including Samsung's Galaxy Tab and Research In Motion's PlayBook. Kobo will continue to function as a standalone operation based in Toronto.

INDIGO LOSS WIDENS

Separately, Indigo said its loss widened to C$40.4 million ($40.0 million), or C$1.39 a share, in the quarter ended October 1, from a loss of C$4.6 million, or 7 Canadian cents, in the same quarter last year.

Revenue rose to $218.5 million from C$214.8 million, driven by higher sales in digital products, gifts and toys.

The company recorded a one-time goodwill impairment charge of C$25.4 million because of its lower share price and declining earnings. Excluding that charge, the net loss was C$9.7 million.

The company said results reflected its transition from physical to digital books.

"The results were expected as we continued to invest heavily in our rapidly growing global digital business and our transformation strategy to become the world's first cultural department store," said Chief Executive Heather Reisman in a release.

(Reporting by Allison Martell; editing by Rob Wilson)

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Comments (1)
nangis wrote:
I purchased two books from Kobo ten days ago and due to a technical problem was unable to download

the books. As part of the fix, I was told to reset my device to factory settings. This erased all

my books (I have purchased about 20). Now the Kobo server is down and I was told by their call

center that it could be up to a week before it is online again. I said this was unacceptable and

they offered no recourse. I posted links to consumer reporters on their facebook page, encouraging

customers to take action. Kobo’s response was to remove the post. This is a company in trouble.

Nov 10, 2011 8:51am EST  --  Report as abuse
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