Major Rona shareholder demands new board of directors
Move comes after CEO leaves after Lowe takeover offer rebuffed
A mutual fund firm that owns more than 10 per cent of home improvement retailer Rona is demanding the company's board of directors be fired and replaced with new members.
Invesco Canada Ltd. is calling for a shareholder meeting "for the purpose of removing RONA's current directors and electing new directors in their place," the company said in a release.
Through various Trimark, Invesco and PowerShares-branded mutual funds, Invesco controls 12,339,911 common shares in Rona, good enough for 10.6 per cent of the company.
Lowe's takeover rebuffed
The move comes at the end of a tumultuous few months for the company.
In September, U.S. chain Lowe's approached Rona with an offer to take over the company for $15 per share, but was rebuffed by Rona CEO Robert Dutton and the Quebec government, which increased its stake in the company by buying up shares in the provincial pension plan and expressing public concern about the U.S. takeover.
Facing that opposition, Lowe's eventually withdrew its offer.
Last week, Dutton suddenly resigned, after Rona's quarterly results showed profits dropped by 90 per cent to a little over $5 million.
Published reports suggest Dutton was a key opponent of the Lowe's takeover.
On Monday, Rona refuted reports in Montreal's La Presse newspaper and the U.S. financial news service Bloomberg that Lowe's had approached Rona with a new takeover offer.
Rona has more than 800 locations across Canada, and employs 30,000 people. Although dominant in the U.S. market, Home Depot and Lowe's are a distant second and third in this country, with 180 and 31 locations each, respectively.