NEW YORK (AP) — Canadian home-improvement company Rona Inc. said Tuesday that it rejected a C$14.50 (US$14.21) per share offer made by Lowe’s Cos. to acquire the company.
Rona Inc. said after careful consideration the offer, which values the company at about C$1.89 billion (US$1.85 billion), was not in its own or shareholders’ best interest.
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“Rona’s strategic focus remains to execute on its business plan with a view to capturing the significant opportunities that it sees for the business,” Rona said in a statement.
The bid is a 22 percent premium to the stock’s closing price Monday of C$11.87. It was received July 8 and rejected July 26.
Lowe’s confirmed the bid and said it was making it public to show shareholders the benefits of the deal. The Mooreseville, N.C.-based company says 15 percent of shareholders support the bid. Lowe’s added the two companies have been in discussions for a year.
“We believe that our proposal is good for Rona and the communities it serves in Quebec as well as across Canada,” CEO Robert Niblock said in a statement. “We encourage the board of Rona to reconsider its position.”
Rona had about 130.5 million shares outstanding as of Oct. 31, 2011. Based in Quebec, it operates 800 stores and 14 hardware and construction material distribution centers.
Lowe’s currently operates 1,712 stores in the U.S., 31 stores in Canada and two in Mexico. Its larger rival Home Depot, meanwhile, operates about 1,974 stores in the U.S. and 180 in Canada. It also has 7 stores in China and 91 in Mexico.
