Rexel has confirmed that it received a $9.4 billion takeover offer from QXO, a value-added reseller of business application software. Rexel released a statement that it has rejected the offer, saying it under values the company.
“Rexel confirms it has received earlier this week an unsolicited, non-binding preliminary proposal from QXO regarding a potential acquisition of Rexel at an indicative price of €28.00 to €28.40 ($31 U.S. dollars) per share.
Rexel’s Board of Directors has reviewed the proposal in detail and has unanimously decided not to pursue it, considering that it significantly undervalues the company and does not reflect its value creation potential through its Power Up 25 strategic plan. The Board of Directors remains highly confident in Rexel’s management to deliver the mid-term objectives presented in during the June 2024 Capital Markets Day. Indeed, Rexel’s management team has successfully demonstrated over the last few years its ability to increase the company’s underlying profitability and enhance its growth profile in an accelerating electrification world.
Rexel does not intend to make any additional comments on this proposal.”
QXO and its Chairman and CEO Brad Jacobs is said to interested in the distribution sector. The company hired former Barclay’s global head of M&A Ihsan Essaid as its chief financial officer. The QXO website details the distribution opportunities, by pointing out, “The industry has generated compound annual revenue growth of 7% over the last five years, based on industry data, and continues to benefit from powerful secular growth drivers. For example, industry reports estimate that the current supply of U.S. homes is 3 million units short of demand, potentially creating long-term tailwinds for both new construction and the repair and remodeling of aging homes. In the nonresidential sector, long-term demand is expected to be driven by growth across multiple industrial and commercial verticals, according to industry sources. America’s public transportation, utility and communication systems, among other types of infrastructure, also require repair or replacement. These market dynamics offer a significant opportunity to unlock QXO’s growth potential through scale and technology.”
QXO has a market value of $6 billion, and is currently debt free. The company told Reuters it is not planning to submit an improved offer.
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