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)