By Paul Vieira
OTTAWA--The government of Quebec believes home-improvement
retailer Rona Inc. (RON.T) is a "strategic asset" for Canada and
shouldn't fall into foreign hands, Quebec Finance Minister Raymond
Bachand said Tuesday.
On a conference call, he said his government - through its
investment arm, Investissement Quebec - is looking at "all means"
available to ensure Lowe's Cos.' (LOW) attempt to acquire the
Boucherville, Que., company proves unsuccessful.
"This is not a play to get a higher price" for Rona shares, Mr.
Bachand said. "I think Rona is a strategic asset for Canada as a
whole."
He noted Rona employs roughly 28,000 people across the country,
while another roughly 90,000 jobs are tied to the manufacturing and
wholesale sectors - which supply Rona with the goods it sells.
Also, Rona supports the Canadian Football League and is a sponsor
for Canada's Olympic team, he said.
Lowe's, of Mooresville, N.C., confirmed earlier Tuesday it made
a proposal valued at 1.76 billion Canadian dollars (US$1.75
billion), or C$14.50 a share, to acquire the Quebec-based company,
adding it had the support of roughly 15% of Rona's shareholders.
Rona's board rejected the unsolicited approach.
"We are not going to nationalize Rona," Mr. Bachand said of his
government's plans, while noting the government could accumulate a
"small part" in the company.
Prior to Mr. Bachand's conference call, Quebec's largest pension
fund - Caisse de Depot et Placement du Quebec, with over C$159
billion in net assets - said it had purchased Rona shares on the
Toronto stock exchange, raising its stake in the retailer to over
14%.
Mr. Bachand said he wasn't advising or directing the Caisse de
Depot to act on the province's behalf. Also, he said he had
informed Canadian federal government of his view that the Rona deal
should be blocked, should it come to fruition.
Canada's federal government has the power to approve or reject
foreign-led takeovers of Canadian companies, under the country's
investment laws. A spokeswoman for Canadian Industry Minister
Christian Paradis, who enforces foreign-investment laws, didn't
respond to requests for comment.
-Write to Paul Vieira at paul.vieira@dowjones.com
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