By The Canadian Press - Tuesday, March 19, 2013 - 0 Comments
MONTREAL – Rona Inc. (TSX:RON) is hiring a veteran of Canada’s grocery industry to…
MONTREAL – Rona Inc. (TSX:RON) is hiring a veteran of Canada’s grocery industry to be its next president and CEO and given him the task of simplifying the embattled home improvement retailer’s business and returning it to profitable growth.
Robert Sawyer will become Rona’s chief executive next month after more than 30 years in grocery retailing, including nearly four years in the No. 2 management position at Metro Inc. (TSX:MRU) — another large Quebec-based national retailer.
“It became increasingly clear to us that to ensure a successful transformation, we needed to hire a specialist in retail and distribution operations,” said Robert Chevrier, executive chairman of Rona’s board of directors.
“Robert has the operational and turnaround expertise needed to put Rona back on the path to profitable growth and increase value for all of our stakeholders.” Continue…
By The Canadian Press - Wednesday, November 14, 2012 at 9:06 PM - 0 Comments
MONTREAL – A battle for control of home renovation company Rona was formally launched…
MONTREAL – A battle for control of home renovation company Rona was formally launched Wednesday after the company’s second-largest institutional shareholder said it was seeking to sweep out the existing board and install new directors.
Invesco Canada, which owns about one-tenth of Rona Inc. (TSX:RON) shares, issued the call for change after the chain reported dismal financial results last week and its long-time chief executive resigned.
The unexpected departure of Robert Dutton came two months after he and the other Rona directors fended off a takeover by American rival Lowe’s.
Invesco announced in a brief release Wednesday morning that it plans “to requisition a meeting of shareholders of Rona Inc. for the purpose of removing Rona’s current directors and electing new directors in their place.”
The fund manager declined to comment on what prompted its bold move to replace Rona’s board or indicate what level of support it has mustered from fellow shareholders.
Rona said late Wednesday that it has not yet received a request for a shareholder meeting from Invesco or any other shareholder. However, it did say Invesco had contacted Rona in the past few days requesting a meeting with its chairman, which it agreed to hold later in the week.
Rona says it heard from Invesco earlier Wednesday saying it no longer wanted to hold the meeting.
Invesco, which operates Trimark, Invesco and PowerShares brands, controls 12.3 million shares of Rona on behalf of investors.
IA Michael Investment Counsel, manager of ABC Funds, which owns about three million shares representing 2.5 per cent of Rona, said it is backing Invesco’s move.
“We support change, we think it’s due,” company president Irwin Michael said in an interview from London, Ont., expressing his disappointment that Rona’s management and board didn’t pursue discussions with Lowe’s.
Michael said he hasn’t been contacted by Invesco and isn’t sure what kind of support will be offered by other shareholders, including independent owners, which form a large block.
“We don’t know what the independents will say or do. It’s the silent majority that will decide on this,” he said.
“Maybe the Invesco group comes forward with a very interesting board of directors. We’d like to see what they have in mind, but clearly it’s a really positive catalyst for the stock at this point. It’s not a done deal, but nonetheless it’s a positive obviously for shareholders who have been on a wild ride on this.”
Institutional investors are unhappy with years of weak results at Rona and the board’s unwillingness to entertain a $14.50 per share cash takeover bid that represents about a 45 per cent premium from when the company’s stock has traded for much of the past year.
Rona said in its proxy circular last year that $100 invested in the company at the end of 2006 was worth little more than $42 five years later.
“It has been a slow grind for the last five years of destructive shareholder and share price and so something’s got to be done. We start with a resignation from Mr. Dutton, this seems like a logical next step and we’ll take it from there,” added Dana Merber, a colleague of Michael.
Shares were up 3.6 per cent Wednesday afternoon, rising 40 cents at $11.38 on the Toronto Stock Exchange.
But other Rona shareholders were laying low, unwilling to comment on Invesco’s efforts.
The Caisse de depot, Rona’s largest shareholder, said it won’t tip its hand at this point and Dimensional Fund Advisors said it “doesn’t comment on individual companies or sectors.” British Columbia Investment Management Corp. declined comment.
Franklin Templeton said it has nothing to add from the comments Richard Fortin, portfolio manager at Bissett Investment Management, made in September in support of dramatic change at Rona.
“We believe that a strategy which focuses solely on the execution of Rona’s current business plan while excluding all other value creating alternatives (including a potential combination with Lowe’s) isn’t in the best interest of shareholders and is the wrong approach.”
On Monday, it denied a newspaper report that it has received a new takeover offer from Lowe’s or has held discussions with its U.S.-based rival.
Derek Dley of Canaccord Genuity said he’s not surprised that large shareholders are restless but wondered why they’ve waited until now to act.
“We’re a little bit unsure about why this wasn’t something that shareholders that were looking for a sale, why they didn’t do this earlier this summer when the bid from Lowe’s was still on the table,” he said from Vancouver.
Dley said it is unlikely that the Caisse would support Invesco’s move. And independent store owners who control about 10 per cent of Rona shares would likely resist.
“It’s going to be challenging because likely your two biggest shareholders are going to be in support of the current board.”
Nonetheless, Dley expects any move to oust Rona’s board would be a drawn-out process.
Any takeover by Lowe’s would also likely face scrutiny from the Quebec government, which — when in opposition — aligned itself with vows from the Charest government to give Rona the power to block such a move.
Rona currently has nearly 30,000 employees and 830 locations under its banner, giving Rona a bigger reach in Canada than Home Depot or Lowe’s, the No. 1 and No. 2 home improvement retailers in the United States. Home Depot has just 180 stores across Canada and Lowe’s has about 31 Canadian locations, out of 1,745 across North America.
By Ross Marowits, The Canadian Press - Monday, September 17, 2012 at 11:09 AM - 0 Comments
MONTREAL – Rona Inc. has some breathing room to build its Canadian home-improvement chain now that U.S. rival Lowe’s has abandoned its controversial plan to acquire the Quebec-based chain for about $1.8 billion.
But Rona’s continued independence will come at a cost to its investors, with its shares dropping more than 10 per cent following the announcement that Lowe’s is no longer contemplating an offer of $14.50 per share cash.
Rona stock dropped $1.37 to $11.40 in early trading Monday on the Toronto Stock Exchange, following the pre-open announcement from Lowe’s Companies Inc. Lowe’s shares (NYSE:LOW) slipped three cents to US$29.37 in New York.
The U.S. chain’s withdrawal Monday comes seven weeks after Rona, the Quebec government and others objected to the U.S. company’s overtures, which had begun privately in late 2011 and became public in late July.
By Scaachi Koul - Monday, September 17, 2012 at 11:03 AM - 0 Comments
U.S. home-improvement giant Lowe’s is no longer seeking to buy Canada’s Rona Inc. The…
U.S. home-improvement giant Lowe’s is no longer seeking to buy Canada’s Rona Inc. The U.S. retailer had planned to acquire the Quebec-based company for $1.8 billion.
Rona and the Quebec government have vehemently objected to Lowe’s overture, which started privately in 2011 and became public in July.
In a statement on Monday, the U.S. company said about the withdrawal: “Lowe’s continues to believe that a combination of Lowe’s and Rona makes business sense and would create significant value for all stakeholders.”
The statement called Rona’s decision to reject the takeover bid “unfortunate.”
By Tamsin McMahon - Monday, August 13, 2012 at 10:55 AM - 0 Comments
As Quebec prepares to block a takeover of Rona, shareholders wonder whose side the company is on
RONA CEO Robert Dutton could be forgiven for being testy with investors at the hardware retailer’s annual general meeting in May. There had been incessant gossiping over whether the company was ripe for a takeover by American rival Lowe’s, and Dutton said it was “demoralizing.” The chain had been busy scooping up smaller retailers and buying back its shares as it fought to cement its place atop Canada’s competitive home-hardware industry. But rumours that Lowe’s, America’s second-largest hardware chain, was angling to gobble up the Boucherville, Que.-based Rona in order to expand its Canadian business have dogged Dutton since before Lowe’s ever set foot in the country. “Look into my eyes,” Dutton once told an industry conference in 2007 as Lowe’s was getting ready to open its first Canadian store. “We are not for sale.”
As it turned out, the speculation was more than just idle gossip. Rona announced at the end of July that its directors had been quietly talking to Lowe’s for nearly a year. The talks had culminated in a $1.8-billion purchase offer in early July, which was swiftly rejected by Rona’s board.
As far as Lowe’s was concerned, its three-page proposal was simple: $14.50 a share, more than 20 per cent above Rona’s stock price at the time, along with a pledge to keep the company’s head office and extensive Quebec supply chain intact.
By Chris Sorensen - Tuesday, July 31, 2012 at 11:44 AM - 0 Comments
Rona executives say they’re not interested in a $1.76 billion takeover offer from rival home improvement chain Lowe’s, but shareholders of the Quebec-based company are betting it might happen anyway. Share’s of Rona are up nearly 20 per cent in early trading Tuesday morning at $14.10. Rona said before markets opened that it had received an informal offer from Lowe’s of $14.50 on July 8, but that its board had decided Rona “should remain focused on executing its business plan with a view to capturing significant opportunities that it sees for its business.”
Quebec’s government also seems keen on blocking any hostile takeover, or at least squeezing more cash out of Lowe’s. The province’s minister of finance, Raymond Bachand, released a statement that highlighted Rona’s importance to the Quebec economy. “This transaction does not appear to be in the interests of either Québec or Canada,” Bachand said.
Analysts had been speculating for months that Rona was ripe for a takeover. Its share price was depressed and its network of nearly 800 stores (operating under various banners), as well as 14 hardware and construction distribution centres, represented an attractive target for Lowe’s, which only has about 31 stores in Canada. By contrast, Home Depot, another U.S.-based chain, has about 180 stores north of the border.
Lowe’s isn’t likely to be deterred. Canada has become a key battleground for U.S. retailers in recent years thanks to our relatively strong economy and hot housing market, the latter of which is particularly attractive when you’re in the business of selling building materials and major appliances.
By Aaron Wherry - Thursday, April 14, 2011 at 6:15 PM - 42 Comments
The morning after the night before, Michael Ignatieff went for a stroll down the adhesives aisle of a Rona in suburban Gatineau. A Liberal candidate stood on each side of him. A semi-circle of photographers and cameramen shuffled backwards in front of him as he went.
Turning the corner he happened upon a shower door that caught his interest. Opening the door, he stepped behind the glass and looked out at the cameramen who clicked away happily. Further on he spotted a tub and signalled for his wife to come have a look. After some consideration, both appeared to be impressed with the bath’s craftsmanship and design.
He continued on between the giant shelves of this high-ceilinged retailer. Turning another corner he came upon an assortment of French doors where, coincidentally enough, someone had set up a podium to which was affixed a red Liberal sign. A row of television cameras had been set up in anticipation of his arrival. Continue…