Dollarama to Buy Retailer Reject Shop for Twice Market Value (1)

Canada’s Dollarama Inc. has agreed to buy Australian discount retailer Reject Shop Ltd. in a deal pitched at a more than 100% premium.

The A$259 million ($163 million) offer values Reject Shop shares at A$6.68 each, more than double Wednesday’s closing price of A$3.15, the companies said Thursday.

Reject Shop shares surged as much as 111% in early Sydney trading, the biggest gain on record.

Reject Shop is Australia’s largest discount retailer with more than 390 stores nationwide, selling a range of private-label and global branded goods, from Colgate toothpaste to homewares and pet food. Dollarama has more ...