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Lowe's (LOW) Affirms C$14.50/Share Bid for Rona

July 31, 2012 8:34 AM EDT Send to a Friend
Lowe's Companies Inc. (NYSE: LOW) confirmed today that it has made a non-binding proposal to the Board of Directors of Canadian home improvement and hardware retailer RONA Inc. to acquire all of the issued and outstanding common shares of RONA for C$14.50 in cash per share. A number of institutional shareholders representing in the aggregate approximately 15% of RONA's outstanding shares have indicated that they support Lowe's proposal. The proposal, which is subject to the satisfactory completion of confirmatory due diligence, represented an attractive premium of 36.7% to the C$10.61 closing share price on July 6, 2012 and a premium of 42.4% to the volume-weighted average share price of C$10.18 for the 20 trading days ended July 6, 2012, the last trading day prior to the submission of the Lowe's proposal. However, the proposal was rejected by the Board of Directors of RONA.

The non-binding proposal was delivered to RONA Board Chairman Mr. Robert Par, on July 8th, 2012. RONA's Board asked Lowe's for additional time to consider the proposal but, subsequently, rejected it. In light of this decision, Lowe's is making its proposal public in its entirety to allow for all RONA shareholders and other stakeholders to evaluate the numerous economic and commercial benefits outlined in the proposal and to allow for shareholders to communicate their views directly to RONA's board.

At RONA's request, the chief executive officers of Lowe's and RONA first met one year ago on July 27, 2011 to discuss a potential relationship between the two companies. RONA's CEO subsequently visited Lowe's in North Carolina to continue the initial discussions. Including these initial meetings, the two companies have discussed or reviewed proposals for a working arrangement between them, including a previous proposal by Lowe's to acquire RONA, dated December 15, 2011. That proposal was rejected by the RONA board.




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