Beacon Roofing Rejects Hostile QXO Bid
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Beacon Roofing Supply Inc. has officially rejected a hostile takeover approach from QXO Inc., setting the stage for a potentially protracted battle for control of the building supplies provider.
In a statement on Feb. 6, Herndon, Va.-based Beacon recommended that its shareholders reject QXO’s $124.25 per share cash offer because it “significantly undervalues the company and its prospects for growth and value creation.”
QXO took its bid for Beacon directly to the target’s shareholders in late January, having already been rebuffed by management. QXO has said it’s prepared to nominate directors to Beacon’s board to push through a deal. Beacon has already adopted a poison pill defense to counter the move. It also has been seeking to attract rival suitors, Bloomberg News reported previously.
“Our offer provides certainty, a significant premium in cash and the ability to close quickly with no regulatory delays, financing risks or diligence conditions,” QXO CEO Brad Jacobs said in a statement Feb. 6.
Jacobs
Beacon ranks No. 63 on the Transport Topics Top 100 list of the largest private carriers in North America and No. 8 on the building materials carriers sector list.
Beacon provides commercial and residential roofing, siding, windows, decking, insulation, specialty lumber, waterproofing and air-barrier systems to the North American building industry. Shares in the company were up 1.9% to about $121.2 at 12:36 p.m. in New York on Feb. 6, giving it a market value of $7.5 billion. QXO’s offer values Beacon at about $11 billion including debt.
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QXO last month made public its unsolicited approach for Beacon, which was tabled in November. In a Jan. 15 letter to Beacon’s board, QXO said the target had been trying to frustrate a deal with “delays, cancellations and unreasonable preconditions.” In response, Beacon said it had offered QXO multiple chances to engage. Beacon is scheduled to hold an investor day on March 13, when it plans to provide long-term financial targets and map out the next chapter of its growth.
QXO has been on the lookout for a sizable acquisition. Last year, it made a 7.6 billion-euro ($7.9 billion) offer to acquire Rexel SA, only to walk away after being rebuffed by the French electrical supplies provider.
Morgan Stanley is acting as financial adviser to QXO. JPMorgan Chase & Co. is working with Beacon. Lazard Inc. has also advised Beacon’s board on the QXO offer, according to the statement.
