QXO (QXO.US) initiates a $11bn takeover bid for Beacon (BECN.US), which the company "snubs" as being too low.

QXO Inc(QXO.US) has launched a $11bn all-cash offer for all outstanding shares of Beacon Roofing Supply(BECN.US), equivalent to $124.25 per share, a 37 per cent premium to Beacon's unaffected 90-day volume-weighted average price as of Nov. 15, 2024. The proposed transaction is not subject to any contingencies related to financing or due diligence. QXO has received fully committed financing from Goldman, Morgan Stanley, Citigroup, Credit Agricole, Wells Fargo and Mizuho. The financing commitments, together with cash on hand, will be sufficient to fund 100 per cent of the purchase price. Earlier, however, insiders revealed that Beacon Roofing Supply had begun to solicit interest from potential buyers to fend off QXO's acquisition offer. Beacon is evaluating strategic and private equity interest, insiders said, after QXO made an unsolicited proposal this month. Beacon rejected QXO's $124.25 cash offer, saying it undervalued the company. Beacon supplies commercial and residential roofing, exterior panels, windows, flooring, insulation, specialty lumber, waterproofing and air barrier systems for the North American construction industry. In a letter to Beacon's board dated Jan. 15, QXO said the target company had been trying to block the transaction through “delay, cancellation and unreasonable contingencies”. Beacon responded that it had offered QXO multiple opportunities to participate in the bidding process after receiving the offer in November. The company plans to hold an investor day on March 13, at which it will announce long-term financial targets and plan the next phase of growth. QXO, a building products company, is looking for a sizable acquisition. Last year, it offered €7.6bn (US$8bn) for Rexel SA, a French electrical products supplier, but withdrew its bid after being rebuffed. QXO is prepared to nominate directors to Beacon's board to push the transaction, but it may still face competition. Stifel Financial Corp. analysts recently said that Beacon “could indeed receive a competitive strategic offer”, with Lowe's (LOW.US) the “most compelling candidate”. Beacon shares rose as much as 3.45 per cent before the US market opened on Monday.