Notable Mergers and Acquisitions of the Day 07/31: (LOW) (FNF)/(JAX) (ALLT) (VLO)
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- 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.
- Fidelity National Financial, Inc. (NYSE: FNF) and J. Alexander’s Corporation (Nasdaq: JAX) amended their previously announced merger agreement. Under the amended agreement, FNF has agreed to make an all cash tender offer for all of the shares of J. Alexander’s for $13.00 per share in cash, valuing the equity of J. Alexander’s at approximately $78 million. FNF’s original proposal to acquire J. Alexander’s was for $12.00 per share in a combination of cash and stock.
Under the terms of the amended merger agreement, FNF will commence a tender offer for all the outstanding shares of J. Alexander’s no later than August 6, 2012. The closing of the tender offer is conditioned on the tender of a number of J. Alexander’s shares that represents at least a majority of the total number of J. Alexander’s shares outstanding and other customary closing conditions. The transaction is not subject to a financing condition. Upon the completion of the tender offer, FNF will acquire all remaining shares of J. Alexander’s through a second-step merger that will result in all shares not tendered in the tender offer being converted into the right to receive $13.00 per share in cash, the same consideration per share as paid in the tender offer. The merger transaction is expected to close in the fourth quarter of 2012, assuming execution of the tender offer process and satisfaction of the conditions to closing.
- Allot Communications Ltd. (Nasdaq: ALLT) signed a definitive agreement to acquire Oversi Networks, a leading global provider of rich-media caching and content delivery solutions for Internet video and peer-to-peer (P2P) traffic.
Under the terms of the acquisition, Allot will be paying $16 million in cash, as well as up to $5 million based on Oversi's performance during 2012. The acquisition is subject to the satisfaction of certain closing conditions, and is expected to close during the third quarter of 2012.
- Valero Energy Corp. (NYSE: VLO) reported that its Board of Directors authorized company management to pursue a separation of Valero`s retail business from the remainder of Valero. The company is currently reviewing several potential separation transactions, including a tax-efficient distribution of the retail business to Valero shareholders. Credit Suisse Securities (USA) LLC is advising Valero in connection with this process.
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