Join our daily newsletter At The Bell to receive exclusive market insights
The Reject Shop (ASX:TRS) has today confirmed its shares will be removed from quotation at the end of the trading day on Tuesday, as its takeover by Canada-based Dollarama cements for good.
Listen to the HotCopper podcast for in-depth discussions and insights on all the biggest headlines from throughout the week. On Spotify, Apple, and more.
The news broke earlier this year that Dollarama wanted to buy TRS, which sent the latter’s share price to levels it hadn’t seen since 2022.
Why shares climbed back above $6.50/sh in February of 2022 – still fairly smack-bang in the thick of COVID – was because supply chain inflation led investors to predict Australians would be shopping at discount retailers like TRS all the more so.
While that may or may not have been true for some, it didn’t really translate into a new share price boom for TRS. A financial report not much later would show NPAT down -9% vs pcp, and that was enough to drive a stake through the heart of phantom value.
So, when Dollarama came knocking, all involved were keen to see the deal go ahead. And, to be fair, this finance journalist struggles to remember the last time he stepped foot inside a Reject Shop.
Still, the stores themselves are unlikely to disappear at the bricks-and-mortar level, though we could see a rebranding. If Dollarama wants to start advertising its name in Australia, it would be an interesting case study for the brand.
The bigger question is whether Dollarama, a giant Canadian discount retailer, understands the Oz economic landscape well enough to make its takeover work.
More market news
Meet GeoGeorge: The HotCopper poster so accurate he got hired as an analyst
“Not possible”: ACCC is taking AGN to court over gas port claims
Not that The Reject Shop’s long-term shareholders would mind – after all, the stock is back to around its COVID highs. At one point, it looked like the bag they may’ve been left with could have been a lot worse.
TRS last traded at $6.69/sh.
Join the discussion: See what HotCopper users are saying about The Reject Shop and be part of the conversations that move the markets.
The material provided in this article is for information only and should not be treated as investment advice. Viewers are encouraged to conduct their own research and consult with a certified financial advisor before making any investment decisions. For full disclaimer information, please click here.
-1200x645-380x200.jpg)
