DavidsTea Inc. says its co-founder resigned from its board of directors this week as his company looks to lead a privatization transaction for the tea chain. Le Chateau founder and Director Herschel Segal, left, chats with Franco Rocchi, senior vice-president of sales and operations after the company's annual meeting Wednesday, July 15, 2015 in Montreal. THE CANADIAN PRESS/Ryan Remiorz
March 08, 2018 - 3:11 PM
MONTREAL - DavidsTea Inc. says its co-founder resigned from its board of directors this week as the company looks to lead a private transaction for the tea chain.
The Montreal-based company, which held its initial public offering in June 2015, says in a statement that Herschel Segal resigned from the board effective March 5.
Segal, who controls Rainy Day Investments Ltd., informed the board about two weeks ago on behalf of RDI that the company decided to start exploring leading a privatization transaction for the struggling chain of 236 tea shops across Canada and the U.S.
DavidsTea says RDI wants to present a proposal for an offer to buy out DavidsTea's minority holders or for an alternative strategic transaction, and that it does not wish to sell any of its DavidsTea shares currently.
The hot beverage retailer announced in Dec. 2017 that its board is considering strategic alternatives such as a potential financing, refinancing or restructuring.
The board formed a special committee of independent directors to consider proposals, including any made by RDI.
The chain reported weaker-than-expected results for its most recent quarter with losses surging 30 per cent from the same time one year prior. The company pointed to challenges in accessories and kits for lower same-store sales.
RDI's chief operating officer Lorenzo Salvaggio also informed the board he is stepping down as a director.
News from © The Canadian Press, 2018