(Bloomberg) — QXO Inc. has launched a hostile takeover bid for Beacon Roofing Supply Inc. after the board of the building products company rejected its offer as too low.
US-based QXO said in a statement on Monday that it’s offering $124.25 per share in cash to shareholders of Beacon. The price values Beacon at about $11 billion including debt.
“Our compelling offer would get cash into the hands of Beacon shareholders immediately at a significant premium to the unaffected share price,” Brad Jacobs, chief executive officer of QXO, said in a statement.
Beacon’s shares closed up 1.6% at $118.42 in New York on Friday, giving the company a market value of about $7.3 billion. The Wall Street Journal reported on Sunday that QXO was set to go directly to Beacon’s shareholders with its bid.
In its own statement on Monday, Beacon urged its investors “not to take any action at this time.” The company said it will issue its formal recommendation regarding QXO’s tender offer within 10 business days.
This month, QXO made public its unsolicited approach for Beacon, which was tabled in November and rebuffed on the grounds that it undervalued the Herndon, Virginia-based company. Bloomberg News reported last week that Beacon has started soliciting potential rival interest from strategic and private equity suitors.
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 after receiving the bid in November. The company 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.
Beacon provides commercial and residential roofing, siding, windows, decking, insulation, specialty lumber, waterproofing and air-barrier systems to the North American building industry.
Morgan Stanley is acting as financial adviser to QXO. JPMorgan Chase & Co. is working with Beacon.
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