Submitted by Fox First at Ten on September 17th
MOORESVILLE, N.C. (AP) - Home-improvement company Lowe's is withdrawing its buyout bid for Rona Inc., saying that the Canadian home-improvement company's board does not seem to want to engage in talks.
Lowe's Cos. says it has repeatedly attempted to engage Rona's board so that it could conduct confirmatory due diligence and move forward with a friendly, negotiated deal.
In July, Lowe's offered 14.50 Canadian dollars ($14.92) per share for Rona, but the company rejected the offer. Based on Rona's 127.4 million outstanding shares, the value of the proposal is 1.85 billion Canadian dollars ($1.9 billion).
Rona said at the time that the bid was neither in its own nor shareholders' best interest. The company, which is based in Quebec, runs approximately 800 stores and 14 hardware and construction material distribution centers.
Lowe's is based in Mooresville, N.C., with 1,745 stores in the U.S., Canada and Mexico
It said Monday that it still feels that the buyout makes sense and would create significant shareholder value.
"It is unfortunate that the Rona board of directors did not recognize the important economic and commercial benefits of this proposal for its stakeholders and for Canada," Lowe's said in a statement.
Lowe's says it is still committed to the Canadian market.
Its shares were steady at $29.40 in premarket trading Monday. Its shares are 9 percent below their high for the year of $32.29 set in mid-April. They are up from their 52-week low of $18.53 set last September.
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