Beacon Board of Directors Unanimously Declines QXO’s Unsolicited Tender Offer
Beacon, the premier publicly traded specialty wholesale distributor of roofing, waterproofing, and exterior products, today announced that its Board of Directors has formally recommended that shareholders reject the unsolicited tender offer from QXO, Inc. (NYSE: QXO). The proposal seeks to acquire all outstanding shares of Beacon common stock at $124.25 per share in cash.
After thorough consultation with independent financial and legal advisors, the Board unanimously determined that the offer significantly undervalues the Company and does not align with the best interests of Beacon or its shareholders.
QXO’s offer price of $124.25 per share remains unchanged from its initial proposal on November 11, 2024, which was publicly disclosed on January 15, 2025. The Board carefully reassessed this offer and unanimously decided to reject it, reiterating its recommendation that shareholders refrain from tendering their shares.
Board’s Rationale for Rejection
“QXO has not enhanced its proposal since the initial offer, which we believe substantially undervalues Beacon and fails to reflect our growth potential,” stated Stuart Randle, Chair of the Board. “We extended multiple invitations to QXO to engage in discussions that could demonstrate a path to increased value, under a buyer-friendly non-disclosure agreement (NDA) that would have preserved their ability to take the offer directly to shareholders and run a proxy contest at our 2025 Annual Meeting.
However, QXO repeatedly declined to engage under these terms, insisting they were uninterested in receiving any confidential information about our business. Our Board remains committed to evaluating all avenues to maximize shareholder value.”
Randle continued, “Beacon has consistently delivered outstanding results, generating over 200% total shareholder returns under our current management team over the past five years. We believe that by continuing the execution of our Ambition 2025 plan, we can drive significantly greater value than what QXO is offering. We look forward to outlining our long-term financial targets for 2028 at our Investor Day on March 13, 2025. For these reasons, we strongly urge our shareholders to reject QXO’s offer.”
Key Reasons for Rejection
In its Schedule 14D-9 filing with the U.S. Securities and Exchange Commission (SEC), Beacon outlined several reasons why shareholders should not accept QXO’s offer:
- Beacon’s Proven Track Record and Growth Potential
- Under the current management team, the Company has generated total shareholder returns exceeding 200% in the past five years.
- The Company has achieved 11 consecutive quarters of record net sales.
- The Ambition 2025 plan continues to drive above-market growth, positioning the Company for sustained long-term success.
- The Offer Undervalues Beacon’s Market Position
- The proposed price does not reflect the Company’s successful execution of its strategic initiatives.
- Beacon operates in a fragmented and expanding market, offering numerous growth opportunities.
- Favorable long-term macroeconomic trends suggest continued industry strength and demand for Beacon’s products.
- Beacon’s Willingness to Engage in Good Faith
- Contrary to QXO’s public statements, Beacon has remained open to discussions and engagement.
- The Company proposed an NDA that would have allowed QXO to access key management insights without restricting their ability to take the offer directly to shareholders.
- QXO refused to engage under customary terms, calling into question their true intentions.
- QXO’s Opportunistic Strategy
- The bid represents an attempt to acquire a market-leading company at a discounted price.
- QXO stands to benefit significantly from Beacon’s strong operational and financial performance, yet the offer does not adequately compensate existing shareholders.
- The Company’s elite M&A and greenfield capabilities make it a highly valuable industry asset that should not be sold at a suboptimal price.
- Significant Uncertainty and Risk in QXO’s Offer
- The offer is subject to numerous conditions, many beyond Beacon’s control, introducing significant uncertainty.
- There is no assurance that QXO will complete the transaction, adding further risk to shareholders who may tender their shares.
- Expert Opinions Confirm the Offer’s Inadequacy
- Financial advisors J.P. Morgan and Lazard both independently determined that the $124.25 per share offer is financially inadequate for shareholders.
- These opinions, delivered to the Board on February 5, 2025, reinforced the view that the offer fails to reflect Beacon’s intrinsic value.
Beacon’s Continued Commitment to Shareholders
Beacon remains focused on executing its long-term growth strategy and delivering superior shareholder value. The Company’s strong market position, coupled with its strategic initiatives, offers shareholders a more compelling financial outlook than QXO’s undervalued offer.
Advisors
Beacon’s Board is being advised by J.P. Morgan and Lazard as financial advisors. Legal counsel is provided by Sidley Austin LLP and Simpson Thacher & Bartlett LLP.
Shareholders are urged to carefully review Schedule 14D-9 filing and reject QXO’s unsolicited tender offer. remains committed to maximizing shareholder value and will continue to execute its strategy to drive sustainable growth and profitability.
