Canadian retailer Rona rejects Lowe's $1.8-bn takeover offer

Canadian retailer Rona Inc today revealed that last month it had rejected a C$1.8 billion ($1.8 billion) takeover offer from US-based Lowe's Cos Inc, the world's second-largest home improvement chain, saying that the deal was not in best interests of its shareholders.

Toronto Stock Exchange-listed Rona said that Lowe had on 6 July offered C$14.50 a share, representing a 36.7 per cent premium to the company's closing price on 6 July.

Lowe had said that its offer has the support of institutional shareholders representing about 15 per cent of Rona's stock, and proposed entering into a friendly transaction.

On 26 July, Boucherville, Quebec-based Rona informed Lowe's that its board of directors have determined that its proposal is not in the best interests of the company and its stakeholders, and requested Lowe's to not pursue a transaction that was not supported by Rona's board.

Lowe's responded two days later by saying that it still desires to proceed with a board-supported transaction and indicated that it will consider all options.

"We reiterate our proposal to the Rona board," said Lowe's CEO, Robert Niblock. "We hope ... Rona's board will reconsider and recognise that our proposal represents a very attractive opportunity for all Rona shareholders and the company's major stakeholders."