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U.S. retailer Lowe’s Cos. Inc. (LOW-N) has retained the services of an Ottawa lobbyist as it tries to navigate tricky political waters in its attempt to land Quebec hardware chain Rona Inc. (RON-T)
Robert Evershed, principal at Prospectus Associates in Corporate Development Inc., disclosed in Canada’s registry of lobbyists that his firm began promoting Lowe’s interests as of Aug. 20.
The list of departments or offices that Robert Evershed plans to court on behalf of the U.S home and building supply retailer is long. It includes the Prime Minister’s Office, the Privy Council, three federal departments (Industry, Foreign Affairs and International Trade, and Finance), the Senate as well as the Economic Development Agency of Canada for Quebec regions.
Lowe’s secretly submitted an offer to acquire Rona for $14.50 a share on July 8, but the Quebec retailer’s board of directors rejected the non-binding $1.8-billion proposal as inadequate.
A spokesman hired by Lowe’s declined to comment on Prospectus Associates’ mandate, other than to confirm it is connected to the informal takeover offer. “We cannot go into specifics, but it is strategic counselling in the context of the proposal presented by Lowe’s to Rona’s board of directors,” said Paul de la Plante of National Public Relations. Evershed declined to comment.
The federal government would have to review any foreign acquisition of Rona to determine if the transaction is of “net benefit” to Canada. The Conservative government has rejected two takeovers since it took power six years ago -- one involving the space unit of MacDonald Dettwiler & Associates and the other a bid for Potash Corp. of Saskatchewan Inc.
The bid by Anglo-Australian mining giant BHP Billiton to acquire the world’s largest fertilizer producer sparked a fierce opposition in Saskatchewan in 2010. The same opposition can now be seen in Quebec, where Lowe’s interest in Rona, disclosed by the Quebec retailer just before Prime Minister Jean Charest launched a provincial election, was met with an uproar.
Quebec Finance Minister Raymond Bachand blasted Lowe’s unsolicited proposal and instructed the government’s investment arm, Investissement Québec, to look into actions to counter the $1.8-billion offer. At the same time, the Caisse de dépôt et placement du Québec, the province’s biggest pension fund manager, boosted its stake in Rona to 14.2 percent.
The protection of Quebec corporate headquarters has now become an election issue, with all parties promising to find ways to shield the province’s business champions.
But while Lowe’s has retained the services of an Ottawa lobbyist, the North Carolina-based company has not attempted to influence Quebec decision-makers, according to the province’s own registry of lobbyists.