The latest salvo between QXO and Beacon in QXO’s takeover attempt is a defensive move that figures to stymie or at least delay QXO’s hostile bid.

Roofing and other building materials distributor Beacon announced Jan. 28 that its board of directors unanimously adopted a limited duration shareholder rights agreement that the company said will protect stockholder interests and maximize value for them. It went into effect immediately.

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“The Rights Agreement is intended to protect Beacon and its stockholders from anyone seeking to opportunistically gain control of Beacon without paying all stockholders an appropriate control premium,” Beacon stated.

Beacon added that the agreement gives its board enough time to review QXO’s offer and is not positioned to prevent a takeover of the company on terms that it considers fair and in the best interests of Beacon and its shareholders.

The rights agreement comes a day after QXO commenced its $11 billion bid to buy Beacon, voicing its offer directly to the latter’s shareholders after accusing Beacon of deliberately reusing to actively engage in a potential deal.

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QXO’s Response

As expected, QXO responded immediately following Beacon’s rights agreement announcement, calling the move “shareholder unfriendly” and a “poison pill” aimed at blocking QXO’s all-cash offer, which is set to expire at the end of Feb. 24..

“We launched our all-cash tender offer to ensure that Beacon’s shareholders can take advantage of our compelling offer and get paid quickly,” QXO Chairman and CEO Brad Jacobs responded. “We have committed financing, have no due diligence condition and anticipate a smooth regulatory approval process to close. The only thing stopping shareholders from acting to get cash expeditiously is the decision by Beacon’s board to adopt a poison pill. We are prepared to take all necessary steps to complete this transaction promptly and deliver significant and immediate value to Beacon shareholders.”

Background

Herndon, VA-based Beacon has maintained that QXO’s offer of $124.25 per share “significantly undervalues” the company, which is noted again in its latest announcement.

Meanwhile, QXO reiterated that its offer represents a 37% premium to Beacon’s 90-day unaffected share price as of Nov. 15, which is the day before word of its purchase plan was first reported by the Wall Street Journal — and a 26% premium to the share price before QXO’s proposal became public.

On Jan. 27, QXO upped the ante by providing an extensive timeline of its communications and negotiation attempts with Beacon in an SEC filing.