September 16, 2024
Rexel Rejects Unsolicited $9+ Billion Takeover Bid
Board unanimously rejects QXO's offer, citing significant undervaluation of the company
Rexel, the French electrical distribution powerhouse, has rejected an unsolicited takeover bid from QXO Inc., the company announced Sunday.
Rexel’s board of directors unanimously decided not to pursue the non-binding preliminary proposal, which offered a price of €28.00 to €28.40 per share. Rexel stated that the offer "significantly undervalues the company and does not reflect its value creation potential through its Power Up 25 strategic plan." Reuters valued the bid at $9.4 billion.
According to Bloomberg, Rexel's largest shareholder, activist investor Cevian Capital AB, supported the board's decision. Cevian Managing Partner Christer Gardell told Bloomberg News that QXO's indicative bid "fails to reflect the value of Rexel."
Rexel reported total sales of €19.15 billion ($20.49 billion USD) in 2023, with North American operations accounting for 43% of revenues. The company employs over 26,000 people globally. Rexel's shares closed at €25.05 on Monday, up 9.1%.
QXO, founded by billionaire Brad Jacobs, aims to become a leader in building products distribution through acquisitions. According to Freight Waves, Oppenheimer analysts emphasize that building products distribution is highly fragmented and ripe for consolidation, with QXO positioned to capitalize on the industry's growth opportunities. QXO's shares dropped 6.5% on Monday following the news of Rexel's rejection.
Rexel's board expressed confidence in the company's management to deliver on mid-term objectives presented during its June 2024 Capital Markets Day. The company stated it does not intend to make additional comments on the proposal.
