Boucherville, Quebec, – RONA inc. (“RONA” or the “Corporation”) (TSX: RON, RON.PR.A), the largest Canadian distributor and retailer of hardware, renovation and gardening products, confirms that its Board of Directors has unanimously determined that an unsolicited, non-binding acquisition proposal recently received from U.S.-based Lowe’s Companies, Inc. (“Lowe’s”) is not in the best interests of RONA and its stakeholders.
The Board believes that in the best interests of RONA and its stakeholders, the Corporation should remain focused on executing its business plan with a view to capturing significant opportunities that it sees for its business.
With a view to ensuring market transparency, RONA believes that it is important for its shareholders and other stakeholders to be made aware of these developments.
RONA’s Board carefully considered Lowe’s non-binding proposal
On July 8, 2012, RONA received an unsolicited, non-binding proposal from Lowe’s to acquire all of RONA’s issued and outstanding shares at a price of $14.50 per share.
Following receipt of the non-binding proposal, RONA’s Board of Directors and a special committee of independent directors, with the assistance of Scotiabank and BMO Capital Markets as their financial advisors and Norton Rose Canada LLP and Davies Ward Phillips & Vineberg LLP as their legal advisors, commenced a review and evaluation of Lowe’s non-binding proposal.
On July 26, 2012, RONA informed Lowe’s that RONA’s Board of Directors and special committee had met on several occasions and had carefully reviewed and considered Lowe’s unsolicited expression of interest with its financial and legal advisors, and that the Board of Directors of RONA had unanimously determined that Lowe’s proposal is not in the best interests of RONA and its stakeholders. 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.
In its July 8 proposal, Lowe’s indicated that it had held discussions with a number of shareholders of RONA and proposed entering into a board-supported transaction. In light of these statements, RONA requested that Lowe’s confirm that it would not pursue a transaction that was not supported by RONA’s Board. On July 28, 2012, Lowe’s responded that it was still its desire to proceed with a board-supported transaction. Lowe’s also indicated that it remained very interested in pursuing a transaction with RONA and was going to consider all of its options.
RONA will provide further updates to the market as and when circumstances warrant.
RONA is the largest Canadian distributor and retailer of hardware, home renovation and gardening products. The Corporation operates a network of close to 800 corporate, franchise and affiliate stores of various sizes and formats under several banners, and a network of 14 hardware and construction materials distribution centres which are flexible and perfectly adapted to the diverse needs of its clientele. RONA is also a leader in the specialized plumbing and HVAC market, primarily serving commercial and professional customers with a network of close to 60 sales outlets and four distribution centres across the country.
In total, RONA supplies nearly 1,500 sales outlets, of which some 840 are under one of its banners, as well as close to 600 clients, independent dealers, in its distribution network. With close to 30,000 employees working under its family of banners in every region of Canada, the RONA store network generates consolidated sales of $4.8 billion and over $6 billion taking into account the total impact of the retail sales of franchise dealers, affiliates and other independent dealers who buy their supplies at RONA. For more information, please visit rona.ca
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