In early August we reported that RONA Inc. (TSX:RON) had rejected an unsolicited takeover bid by U.S.-based Lowe’s Companies, Inc. (NYSE:LOW), but that Lowe’s refused to go away quietly. Lowe’s publicly announced its offer and RONA’s rejection in an effort to give RONA’s shareholders an opportunity to evaluate the offer for themselves and hopefully put pressure on the company.
This morning Lowe’s announced that it has finally withdrawn its offer.
In its statement, Lowe’s stated that it:
“has repeatedly attempted to engage the Board of Directors of RONA with respect to its proposal in order to conduct confirmatory due diligence and move forward with a friendly, negotiated transaction.”
“Lowe’s continues to believe that a combination of Lowe’s and RONA makes business sense and would create significant value for all stakeholders. 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 remains committed to the Canadian market and will continue delivering outstanding home improvement products and services to its Canadian customers.”
In its reporting, Reuters noted that the issue was a hot-button issue in recent provincial elections, with politicians from both of the two major parties in the province of Quebec coming out strongly against the takeover.
As RONA is “the largest Canadian distributor and retailer of hardware, home renovation and gardening products”, provincial officials were prepared to fight hard to keep the company Quebec based. Some provicial leaders even threatened government action to prevent the takeover.
So it looks like this story is over for now.