Tuesday, July 31, 2012

Rona rejects take over bid from Lowes

Rona rejects Lowe’s buyout offer

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Reuters
Tuesday, Jul. 31, 2012

Rona Inc, a Canadian home-improvement retailer, rejected Lowe’s Cos Inc’s unsolicited US$1.8-billion takeover offer, saying it was not in the best interests of shareholders.

Rona said it received a US$14.50 per share proposal from U.S.-based Lowe’s, the world’s second-largest home improvement chain, on July 8.

Shares of Rona, which has a market value of $1.44-billion, closed at $11.87 on Monday on the Toronto Stock Exchange. The stock has risen 12% in the past three months amid speculation that Lowe’s could be interested in the company.

Lowe’s Chief Financial Officer Robert Hull said in April the company was open to all options should the Canadian chain put itself up for sale. He called Rona a “very interesting company”.

Rona, Canada’s home-grown answer to Home Depot Inc and Lowe’s, has maintained it was not up for sale.

The company should remain focused on executing its business plan with a view to capturing significant opportunities that it sees for its business, Rona said in a statement.

It is now closing or splitting up 23 of its 79 biggest outlets after facing sluggish consumer confidence and smarting from falling sales at established stores.

Scotiabank and BMO Capital Markets were Rona’s financial advisors for the deal.

© Thomson Reuters 2012

Posted in: Investing Tags: Retail, Lowe’s Cos Inc, RONA Inc.

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