Quebec gov’t against $1.7B bid for Rona
MONTREAL — Quebec has come out swinging against a $1.76-billion bid for Canada’s largest home improvement company by U.S.-based Lowe’s, which is expected to keep up the pressure to buy Rona despite having its offer rejected by the homegrown retailer.
Rona said Tuesday it refused Lowe’s unsolicited takeover of $14.50 per share because it wasn’t in the interest of its shareholders. The deal would have given Lowe’s a much bigger foothold in Canada.
But the overture caught the attention of Quebec’s provincial government, which said it is vehemently opposed to the company falling into foreign hands, while powerful pension manager Caisse de depot et placement du Quebec promptly increased its stake in Rona.
“This transaction, in our opinion, is not in the interests of either Quebec or Canada,” Quebec Finance Minister Raymond Bachand told a news conference.
Bachand said the government’s investment arm, Investissement Quebec, could buy shares in Rona and lead a coalition to counter Lowe’s bid, but stopped short of saying his Liberal government would block a sale.
“It’s too early to call that one,” he said, noting Lowe’s friendly offer has been rejected.
Rona has played an strategic role in creating tens of thousands of jobs through store employees, suppliers and manufacturers in the province and in the rest of Canada, including 50,000 in Quebec, he said.
“Rona is a major player in Quebec’s economy, particularly in the manufacturing industry because of its extensive network of suppliers and strong links with many regional players across Canada.”
Tuesday’s public disclosure of the offer followed months of rumours that Lowe’s had Rona in its sights — rumours that only intensified after Rona announced the closure of a dozen warehouse stores in Canada earlier this year following disappointing results.