Canada has become all the recent rage for U.S. based companies, and yet another entrant into the market, home improvement company Lowe’s (NYSE:LOW), is making a big effort to increase its presence.
However that effort will have to wait, as Quebec, Canada based Rona (TSE:RON) rejected Lowe’s $14.91 cents per share offer price for the 800-plus store outfit made in July.
Lowe’s has been operating in Canada since 2007 through its nearly 30 stores throughout the country. Within the last year a number of American based companies, from Target (NYSE:TGT) to Nordstrom (NYSE:JWN), have made Canada a prime target for expansion.
Lowe’s belief that the acquisition makes economic sense doesn’t appear to be shared by Rona management, who went as far as to ignore a request to perform due diligence in order to move forward with what is described as a “friendly transaction.”
Rona’s board expressed concern over a potential loss of jobs at the company despite assurances from Lowe’s. Additionally, according to the Wall Street Journal Lowe’s was faced with political opposition to the deal from Ontario lawmakers who want to keep Rona in local hands.
Shares of Rona dropped just over 8% in morning trading on the news, while Lowe’s shares were down fractionally.
-Written by Marc Bastow, Assistant Editor at InvestorPlace.com