Lowe's Companies Inc. (LOW) confirmed that it has made a non-binding proposal to the board of directors of Canadian home improvement and hardware retailer RONA Inc. (RON.TO) to acquire all of the issued and outstanding common shares of RONA for C$14.50 in cash per share.
Lowe's noted that a number of institutional shareholders representing in the aggregate around 15% of RONA's outstanding shares have indicated that they support Lowe's proposal. The proposal represented an attractive premium of 36.7% to the C$10.61 closing share price on July 6, 2012 and a premium of 42.4% to the volume-weighted average share price of C$10.18 for the 20 trading days ended July 6, 2012, the last trading day prior to the submission of the Lowe's proposal. RONA's board of directors rejected the proposal.
Robert Niblock, chairman, president and chief executive officer of Lowe's, stated, "We reiterate our proposal to the RONA Board. We hope that in the exercise of its fiduciary duties, RONA's Board will reconsider and recognize that our proposal represents a very attractive opportunity for all RONA shareholders and the company's major stakeholders. Bottom line, we believe that our proposal is good for RONA and the communities it serves in Quebec as well as across Canada, and it is also good for consumers. We encourage the Board of RONA to reconsider its position."
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