Billionaire Brad Jacobs bypasses Beacon's board
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Beacon says it is looking for alternative buyers to raise price
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Shareholders have until Feb. 24 to tender shares
(Rewrites for context, add details on Buy Best Private Proxy talks)
By Sabrina Valle and Anshuman Tripathy
Jan 27 (Reuters) - Billionaire Brad Jacobs on Monday took his QXO $11 billion takeover offer for Beacon Roofing to shareholders, after North America's largest publicly traded distributor of roofing materials repeatedly rebuffed his offer.
By reaching out to Beacon shareholders directly, QXO Chief Executive Brad Jacobs effectively bypassed Beacon's board and management. His proposal was either ignored or rejected on 15 occasions between July and December 2024, the company said in a filing, with Beacon's CEO engaging with Jacobs only once.
Beacon's shares rose 1% to $119.55.
RBC Capital Markets analyst Michael Dahl said shareholders seem supportive of a takeover for the proposed $124.25 per share, 4% above Monday's close and 26% above the price of the stock the day before news about a potential deal emerged.
Without a compelling alternative, Dahl says, Beacon and QXO are more likely than not to reach a deal.
While strategic or private equity firms could yet emerge as potential suitors, "a bidding war seems unlikely and a proxy fight could be challenging", said Jefferies analyst Philip Ng.
Beacon's board, which has 10 days to respond, said it is looking for other potential buyers to increase the price offer.
Its shareholders have until Feb. 24 to tender shares, unless QXO extends the offer and waives conditions. Jacobs said he plans to close the deal right after the tender period expires.
Jacobs met Beacon CEO Julian Francis by videoconference "for the first and only time" on July 22, 2024, according to a filing detailing the failed engagement.
Earlier this month, Jacobs made his offer public. Beacon rejected it, saying the proposal significantly undervalued the company. Beacon urged its shareholders on Monday not to take any action at the time and said it will evaluate QXO's tender offer to determine the course of action.
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Jacobs has built an empire of multibillion-dollar companies spanning industries from logistics to waste management and equipment rentals by acquiring companies in industries undergoing consolidation, and spinning some of them off at a higher value.
In 2023, Jacobs invested about $1 billion in a software company which he renamed as QXO. He wants to turn QXO into "a forward-looking leader in building products distribution," a $800 billion industry. And promised to deliver tens of billions of dollars of annual revenue in the next decade.
Shares of QXO were down 3.7% on Monday. The company said it intends to pursue all options to complete a transaction, including nominating directors for election at Beacon's annual meeting.
QXO said it had secured full-financing commitments from Goldman Sachs, Morgan Stanley, Citi, Credit Agricole, Wells Fargo and Mizuho.
The company counts U.S. President Donald Trump's son-in-law, Jared Kushner, as a board member.
Morgan Stanley & Co. LLC is acting as lead financial advisor to QXO and JPMorgan is advising Beacon. (Reporting by Sabrina Valle in New York and Anshuman Tripathy in Bengaluru; Editing by Devika Syamnath and Stephen Coates)
*
Beacon says it is looking for alternative buyers to raise price
*
Shareholders have until Feb. 24 to tender shares
(Rewrites for context, add details on Buy Best Private Proxy talks)
By Sabrina Valle and Anshuman Tripathy
Jan 27 (Reuters) - Billionaire Brad Jacobs on Monday took his QXO $11 billion takeover offer for Beacon Roofing to shareholders, after North America's largest publicly traded distributor of roofing materials repeatedly rebuffed his offer.
By reaching out to Beacon shareholders directly, QXO Chief Executive Brad Jacobs effectively bypassed Beacon's board and management. His proposal was either ignored or rejected on 15 occasions between July and December 2024, the company said in a filing, with Beacon's CEO engaging with Jacobs only once.
Beacon's shares rose 1% to $119.55.
RBC Capital Markets analyst Michael Dahl said shareholders seem supportive of a takeover for the proposed $124.25 per share, 4% above Monday's close and 26% above the price of the stock the day before news about a potential deal emerged.
Without a compelling alternative, Dahl says, Beacon and QXO are more likely than not to reach a deal.
While strategic or private equity firms could yet emerge as potential suitors, "a bidding war seems unlikely and a proxy fight could be challenging", said Jefferies analyst Philip Ng.
Beacon's board, which has 10 days to respond, said it is looking for other potential buyers to increase the price offer.
Its shareholders have until Feb. 24 to tender shares, unless QXO extends the offer and waives conditions. Jacobs said he plans to close the deal right after the tender period expires.
Jacobs met Beacon CEO Julian Francis by videoconference "for the first and only time" on July 22, 2024, according to a filing detailing the failed engagement.
Earlier this month, Jacobs made his offer public. Beacon rejected it, saying the proposal significantly undervalued the company. Beacon urged its shareholders on Monday not to take any action at the time and said it will evaluate QXO's tender offer to determine the course of action.
NEW PLAYER
Jacobs has built an empire of multibillion-dollar companies spanning industries from logistics to waste management and equipment rentals by acquiring companies in industries undergoing consolidation, and spinning some of them off at a higher value.
In 2023, Jacobs invested about $1 billion in a software company which he renamed as QXO. He wants to turn QXO into "a forward-looking leader in building products distribution," a $800 billion industry. And promised to deliver tens of billions of dollars of annual revenue in the next decade.
Shares of QXO were down 3.7% on Monday. The company said it intends to pursue all options to complete a transaction, including nominating directors for election at Beacon's annual meeting.
QXO said it had secured full-financing commitments from Goldman Sachs, Morgan Stanley, Citi, Credit Agricole, Wells Fargo and Mizuho.
The company counts U.S. President Donald Trump's son-in-law, Jared Kushner, as a board member.
Morgan Stanley & Co. LLC is acting as lead financial advisor to QXO and JPMorgan is advising Beacon. (Reporting by Sabrina Valle in New York and Anshuman Tripathy in Bengaluru; Editing by Devika Syamnath and Stephen Coates)
