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Quebec Finance Minister Raymond Bachand says Lowe’s proposed takeover of Rona is not in the provincial or national economy’s best interest. (Mathieu Belanger/THE CANADIAN PRESS)
Quebec Finance Minister Raymond Bachand says Lowe’s proposed takeover of Rona is not in the provincial or national economy’s best interest. (Mathieu Belanger/THE CANADIAN PRESS)

Interview

Lowe’s offer ‘the hollowing out of Canada,’ Bachand says Add to ...

[French] This is Day 1. The other company has not tabled a formal offer. They have made an informal proposal to Rona’s board of directors ... The board of directors rejected it. Will the other party make an offer? Investissement Quebec is certainly free to conduct a certain number of market transactions. This kind of process will take many weeks.

Will you ask the federal government to block the transaction, as Saskatchewan did [in the case of Potash Corp.]?

I have already made Mr. Paradis, the Industry Minister, aware of this transaction and that it is in the interest of Canada. We’re talking about 100,000 jobs in Canada.

You talk of how important this company is but is strategic to such an extent? It’s not, after all, a company that must at all costs be protected, is it?

... We are in a globalizing world where Bombardier buys, Couche-Tard buys, Canadian companies are bought or sold.

[English] That’s fine with me.

[French] Generally, we don’t interfere in the market. When you have one of the biggest distributors and retailers in Canada, I think its a major strategic interest because we’re talking about some 10,000 suppliers. We’re talking about 80,000 jobs in Canada just for Rona suppliers.

[English] That’s not counting the 28,000 employees of Rona.

[French] Is there a link between Investissement Quebec possibly buying shares and the Caisse having bought more shares?

The Caisse de depot is autonomous and independent. You saw this morning’s news release [from the Caisse] which sees the long term interests of its depositors, but also the economic interest of Quebec and it decided to take action in the market. I found out just like you, reading the news release about 20 minutes ago.

Did you have direct talks with Lowe’s and with Rona in the past few months regarding this transaction?

I didn’t have direct discussions with Lowe’s. Yes, I spoke with the CEO of Rona. Because it’s not a surprise transaction. At Lowe’s annual meeting, or the meeting for analysts, it was stated that they were interested in Rona. Of course this has been on my radar for some time.

What will you do if shareholders say yes to an offer from Lowe’s?

We’re far from that outcome. This process will take several weeks. Lowe’s got a very clear message today ... I saw earlier the news release from the Solidarity Fund backing Rona’s position. So a company – particularly a retail company – can sometimes get the message.

How can you justify your opposition [to a Rona acquisition] when everyone in Quebec was overjoyed by the fact that Couche-Tard bought a big retailer in Norway? Now, an American company that wants to buy a big retailer in Quebec and it’s no go.

Because it’s not just a retailer. It’s one of the biggest wholesalers in Canada. That makes it a huge buyer.

Do you think Ottawa will block this transaction? If not, how much are you prepared to [invest]?

First, Lowe’s has not made a formal, hostile public offer. So I would say your question is premature.

How much are you prepared to put in?

I don’t have an answer to that question today. But look, we’re not going to nationalize Rona. Let’s be serious. There is consulting to be done [with pension funds and institutional investors].

[English] What kind of message do you think it says to investors from outside when the government is willing to block you to prevent you from investing in Quebec?

Quebec is the free trader of Canada. It’s because of Quebec that we have free trade with the United States. We’re the leader with free trade with Europe and we welcome foreign investments, both companies that come from abroad and foreign investors investing in Quebec, including acquiring companies. So it’s not an ideological question. It’s a very pragmatic question.

In this particular case, Rona is a major, major player in the Quebec economy.

It’s the hollowing out of Canada, basically. It’s such an important part of your retail and wholesale sector [that] is let go. And that’s why we think it’s not in the interests of Quebec, nor of Canada.

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