Lowe’s Offers $1.8 Billion for Rona

Lowe’s takeover bid | BCBusiness
Home retailer Lowe’s could keep knocking on Rona’s door in hopes the Canadian home improvement chain will accept its friendly takeover bid.

The American rival store remains undaunted after Canada’s largest home-improvement chain rejects its unsolicited takeover bid.

Another foreign investor with deep pockets is courting a successful Canadian-grown company.

Lowe’s, one of the largest home retail chains in the U.S., put up an impressive $1.76 billion for Canadian rival Rona, which it swiftly rejected on the grounds that it wouldn’t be the best move for its shareholders.

The unsolicited takeover offer comes just a week after the state-run Chinese National Offshore Oil Company initiated one of the largest foreign takeovers in Canadian business history when it bought Calgary’s Nexen for just over $15 billion.

Lowe’s doesn’t seem to agree that the deal is outside shareholder’s interests. While execs at Canada’s home-grown answer to Home Depot panned the bid, Lowe’s has hinted it might try a hostile takeover in the near future by going straight to Rona’s shareholders.

Although a hostile takeover bid may be in the works, the international deal would need approval from the federal government. Judging from Quebec’s response to the bid, it’s unlikely the deal would get the green light.

The decision from the Quebec-based chain received open support from the provincial government, including the finance minister, who believe it’s in the interest of Quebec’s economy to keep Rona’s reins in the hands of fellow Canadians.