QXO Commences $11B Takeover Bid for Beacon - Modern Distribution Management

QXO Commences $11B Takeover Bid for Beacon

Beacon acknowledged the tender offer and recommended that shareholders take no action at this time.
QXO and Beacon

On Jan. 15, QXO — the building materials distribution platform started in late 2023 by Brad Jacobs — confirmed its November offer to buy Beacon Roofing Supply.

Beacon verified, later that day, that its Board of Directors “thoroughly evaluated” and unanimously rejected that “unsolicited, non-binding” proposal from QXO.

On Jan. 27, QXO announced a more time-sensitive bid to purchase all outstanding shares of Beacon for approximately $11 billion, which expires in 20 business days.

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“Our compelling offer would get cash into the hands of Beacon shareholders immediately at a significant premium to the unaffected share price,” QXO Chairman and CEO Brad Jacobs said in the statement. “We believe that Beacon would be a strong fit for QXO and a key part of our plan to become a forward-looking leader in building products distribution.”

The Beacon Board responded to the offer in a Jan. 27 release saying it will carefully assess QXO’s offer to decide the best course of action for the company and its shareholders.

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However, Beacon said QXO’s offer price of $124.25 per share remains unchanged from its November proposal, publicly disclosed on Jan. 15. The board previously evaluated this proposal and rejected it, claiming it significantly undervalued the company and did not serve the best interests of Beacon or its shareholders.

Meanwhile, QXO maintains that its offer of $124.25 per share is 17% higher than the Beacon stock has ever traded; represents a 37% premium over the 90-day unaffected stock price; and represents a 26% premium to the stock the day before the Wall Street Journal’s Nov. 18 report that QXO was pursuing a deal.

Herndon, VA-based Beacon stated that while it recommends shareholders take. Inaction at this time, it will provide its recommendations to them about the offer within 10 business days through a filing with the U.S. Securities and Exchange Commission.

The company is No. 5 on MDM’s Top Building Materials/Construction Distributors List with $9.1 billion in 2023 revenue.

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