The Federal Court of Australia has approved Dollarama’s acquisition of The Reject Shop, setting the stage for a significant shift in the Australian discount retail landscape. Shareholders are poised to receive a special dividend and a cash payout as the scheme becomes effective.
- Federal Court approves Dollarama’s scheme of arrangement for The Reject Shop acquisition
- Scheme becomes legally effective upon ASIC lodgement on 1 July 2025
- Trading of The Reject Shop shares to be suspended from market close on 1 July 2025
- Shareholders to receive a $0.77 special dividend on 14 July and $5.91 scheme consideration on 22 July
- Acquisition marks a major cross-border retail consolidation
Federal Court Approval Clears Major Acquisition Hurdle
The Reject Shop Limited has reached a pivotal milestone in its proposed acquisition by Canadian retail giant Dollarama Inc., with the Federal Court of Australia granting formal approval to the scheme of arrangement. This legal endorsement effectively greenlights the transaction, which has been closely watched by investors and market participants given its scale and strategic implications.
The scheme will become legally effective once the court orders are lodged with the Australian Securities and Investments Commission (ASIC) on 1 July 2025. Following this, The Reject Shop’s shares will be suspended from trading on the ASX, marking the end of its independent public listing.
Financial Terms and Shareholder Returns
Under the terms of the deal, shareholders holding The Reject Shop shares as of 7 July 2025 will receive a special dividend of 77 cents per share, paid on 14 July. Subsequently, on 15 July, shareholders on record will be entitled to the scheme consideration payment of $5.91 per share, which is expected to be disbursed on 22 July.
Combined, these payments reflect a total cash consideration of $6.68 per share, representing a premium over the company’s recent trading prices and underscoring Dollarama’s confidence in the value of The Reject Shop’s Australian discount retail footprint.
Strategic Implications for the Discount Retail Sector
This acquisition signals a significant cross-border consolidation in the discount retail sector, with Dollarama expanding its reach into the Australian market through a well-established local player. The Reject Shop’s extensive network and brand recognition provide a strong platform for Dollarama to leverage its operational expertise and scale.
For shareholders, the deal offers immediate liquidity and a clear exit at an attractive valuation. For the broader market, it raises questions about competitive dynamics and potential shifts in retail strategies as Dollarama integrates The Reject Shop’s operations.
Next Steps and Market Watch
Investors should watch for the formal lodgement of court orders with ASIC, which will trigger the scheme’s legal effectiveness and share suspension. Communication lines remain open for shareholders seeking clarity on payment timelines and procedural details.
As the transaction moves toward completion, analysts will be keen to assess how Dollarama’s entry reshapes the discount retail landscape in Australia and what this means for competitors and consumers alike.
Bottom Line?
With court approval secured, all eyes now turn to the scheme’s implementation and the unfolding retail consolidation story.
Questions in the middle?
- How will Dollarama integrate The Reject Shop’s operations and brand identity?
- What impact will this acquisition have on pricing and competition in Australian discount retail?
- Could this deal trigger further cross-border retail consolidations in the region?