Lowe’s Cos to buy Rona for $3.2 billion to create home improvement giant
原始发布日期： 2016-02-03 发布者：李方字变大 字变小
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Lowe’s Cos to buy Canada’s Rona for $3.2 billion in cash to create home improvement giant
In a deal it calls “very much pro-Canada”, U.S. hardware giant Lowe’s Cos. said Wednesday it has agreed to buy rival Rona Inc. for $3.2 billion in cash to create one of Canada’s biggest home-improvement retailers. Lowe’s will pay $24 per share in cash, it said in a statement, more than double yesterday’s closing price of $11.77. It agreed to pay $20 for the Boucherville, Quebec-based company’s preferred shares. The boards of both companies approved the planned transaction. The transaction is supported by management of both companies, although it would require various approvals. Rona’s largest shareholder, the Caisse de dépôt et placement du Québec, confirmed Wednesday that it will tender its shares under the offer made by Lowe’s. The Caisse, which owns 17 per cent of the company, says that it was supporting the deal because of “duties to its clients,” the unanimous recommendation by Rona’s board of directors, the fact that it carries a 105 per cent premium, and its promises to retain a presence in Quebec. “Overall, la Caisse believes the transaction will result in equal or superior economic activity generated by the Rona banners in Québec,” said the institutional investor that manages several pension and insurance programs in the province in a news release Wednesday. Rona shares spiked 100 per cent when markets opened to $23.46. Lowe’s withdrew a $1.8 billion unsolicited bid for Rona more than three years ago after the board and some Quebec politicians opposed the offer, concerned about a loss of jobs and control of the Quebec-based retailer. The withdrawal came just 12 days after the separatist Parti Quebecois won elections. Since then, the Liberals have taken power in Quebec, the economy has slumped and the currency has plunged, making it cheaper for Lowe’s to offer a richer premium. The loonie has dropped to 72 cents versus the U.S. dollar, compared with parity when Lowe’s pulled its bid. So while the $24 a share bid in Canadian dollar terms is about 65 per cent higher than the $14.50 a share bid that was rejected, in U.S. dollar terms the offer is just 16 per cent higher. By opposition remains. Wednesday, Parti Québécois leader Pierre Karl Péladeau tweeted a challenge to Quebec’s new minister of economy, Dominique Anglade, to take a stand against the purchase. “A first test for : Will she intervene or let Quebec lose another company headquarters. Will she resist her own premier,” he tweeted. Rona : Première épreuve de @DomAnglade Interviendra ou laissera-t-elle perdre un autre siège social. Résistera-t-elle à son PM ? #polqc — Pierre Karl Péladeau (@PKP_Qc) February 3, 2016 //platform.twitter.com/widgets.js This time, Lowe’s says it has made a number of commitments to ensure the deal goes through, including maintaining its Canadian base in Boucherville, Que., keeping the Rona store banners and retaining “the vast majority” of current employees. “The commitments are very much pro-Canada in our long-term commitment to what it takes to grow in this market,” Robert Hull, Lowe’s CFO, said on a conference call. The transaction will create a company with about $5.6 billion in annual revenue that will seek to capture a greater share of Canada’s growing home-improvement industry, worth more than $45 billion, Lowe’s Chairman and Chief Executive Robert Niblock said in the statement. Lowe’s has identified more than $1 billion of opportunities to further increase revenue and operating profitability in Canada, where it could double operating profitability in five years, according to the statement. “Importantly, the transaction also provides us with entry to Quebec, where we have no presence. And a province that accounts for almost 25% of the total Canadian market,” Niblock said in the conference call. “We believe the time is right to take the next step in the evolution of the Rona family,” Rona chairman Robert Chevrier said in a statement Wednesday morning. “The team at Lowe’s has presented us with an excellent plan that enables our company to maintain its brand power while at the same time leveraging Lowe’s global presence to build upon and expand our reach.” The Montreal-area company employs about 17,000 people directly across Canada and its affiliated dealers employ a further 5,000. In total, Rona has nearly 500 stores owned by the Montreal-area company and independent affiliated dealers across Canada. It also has nine distribution centres and a head office in Boucherville, Que., in the South Shore region near Montreal. Lowe’s already has a presence in Ontario and other parts of Canada, but trails Rona and U.S.-based Home Depot in terms of locations. In the United States, it’s the No. 2 home improvement retailer after Home Depot. CIBC World Markets Inc. and RBC Capital Markets advised Lowe’s. Stikeman Elliott LLP served as legal counsel to Lowe’s in Canada, while Hunton & Williams LLP did so in the U.S. Scotia Capital Inc. was Rona’s financial adviser and Norton Rose Fulbright Canada LLP its legal counsel. With files from Bloomberg and Canadian Press (Calgary Herald) |