Rona Inc. shareholders have overwhelmingly voted in favour of U.S. rival Lowe's Cos. $3.2-billion takeover offer.
Investors in the Boucherville, Que.-based home-renovation chain voted 99.92 per cent for Lowe's $24 per-share offer at a special shareholders' meeting Thursday morning. The proposed transaction – which must still be approved by the federal Competition Bureau and Investment Canada – represents a premium of 104 per cent to the closing price of Rona's common shares before the deal was announced last month.
But preferred shareholders – who were being offered only $20 a share, a 59-per-cent premium – turned down the proposal. A total of almost 75 per cent of the shares were voted against the deal. The preferred shares, however, represent only about two per cent of the company's total equity and have no influence on the deal's outcome.
Among common shareholders, the rate of participation was 70.22 per cent, compared with 43.01 per cent on the preferred-share side.
Rona chairman Robert Chevrier said after the meeting he is "very very very pleased" with the result.
"We've done a lot of homework to satisfy [Lowe's] that the price was justified."
Asked if he is confident Lowe's will keep its promises not to slash jobs as well as keep head office operations intact and continue buying from local suppliers, Mr. Chevrier replied: "They will. I know a little bit more about them. They are good corporate citizens."
But shareholder-rights activist Jean Dorion said after the meeting he wants the federal and provincial governments to extract iron-clad agreements from Lowe's guaranteeing that jobs, local supply contracts and head office operations are maintained.
"We hope that government authorities pressure [Lowe's] so that the commitments made by Lowe's are respected," he said.
After less than three years on the job, Rona chief executive officer Robert Sawyer is to be replaced by Sylvain Prud'homme, current president of Lowe's Canada. Mr. Sawyer stands to collect more than $22-million from his equity holdings in Rona. He is also eligible for severance payments valued at about $4.15-million, according to a company proxy circular.