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Redeemable preferred shares
3 Months Ended
Apr. 29, 2017
Temporary Equity [Abstract]  
Redeemable preferred shares
Redeemable preferred shares
On October 5, 2016, the Company issued 625,000 shares of Series A Convertible Preference Shares (“preferred shares”) to Green Equity Investors VI, L.P., Green Equity Investors Side VI, L.P., LGP Associates VI-A LLC and LGP Associates VI-B LLC, all affiliates of Leonard Green & Partners, L.P., (together, the “Investors”) for an aggregate purchase price of $625.0 million, or $1,000 per share (the “Stated Value”) pursuant to the investment agreement dated August 24, 2016. In connection with the issuance of the preferred shares, the Company incurred direct and incremental expenses of $13.7 million. These direct and incremental expenses originally reduced the preferred shares carrying value, and will be accreted through retained earnings as a deemed dividend from the date of issuance through the first possible known redemption date, November 2024. Accumulated accretion recorded in the condensed consolidated balance sheets was $1.0 million as of April 29, 2017 (January 28, 2017: $0.6 million). Accretion of $0.4 million was recorded to preferred shares in the condensed consolidated balance sheets during the 13 weeks ended April 29, 2017.
Pursuant to the preferred shares conversion features, the conversion rate as of April 29, 2017 is 10.7707 (January 28, 2017: 10.6529) common shares per preferred share or a conversion price of $92.8445 (January 28, 2017: $93.8712). As of April 29, 2017 and January 28, 2017, the maximum number of common shares that could be required to be issued if converted was 6.7 million shares. Preferred shareholders are entitled to a cumulative dividend at the rate of 5% per annum, payable quarterly in arrears. Refer to Note 5 for additional discussion of the Company’s dividends on preferred shares. The liquidation preference was $632.8 million and $636.3 million as of April 29, 2017 and January 28, 2017, respectively.