NV manager hopes Rona stays Canadian

Worries about repercussions if U.S. giant Lowe's takes over

HOME improvement giant Lowe's is currently lobbying Ottawa in a bid to secure a deal that would see the U.S. retailer take over Rona.

Lowe's offered $14.50 a share, or about $1.76 billion, for the Canadian home improvement company in July only to have the offer rejected by Rona's board of directors.

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Since then, Lowe's has dispatched lobbyist Robert Evershed to gain approval from Canada's Ministry of Industry for the takeover.

In North Vancouver, Rona's West First Street store manager Michael Allen is doing what he can to squash the deal.

Lowe's big box corporate culture is at cross-purposes with Rona, according to Allen.

"Ultimately they're not compatible at all. Right now the Lowe's business model is a corporate entity only, that only operates big box stores in the U.S. and Canada and they've never veered from that model thus far, so it's tough to believe that they'll veer from them today," Allen said.

The store manager elaborated on his views in a recent letter to the CEO of Lowe's signed by managers and owners from approximately 130 Rona stores.

"Collectively we have invested hundreds of millions of dollars in recent years alone, which serves to underscore our commitment to our licensing agreements and our dedication to the Rona business model and its future plans," Allen wrote.

The letter was titled No, Thank You.

Besides 80 big box stores, the Rona chain includes 350 independently owned shops, which range from modest hardware stores to giant warehouses.

The diversity of Rona's approach and their commitment to rural areas distinguish the retailer from Lowe's, according to Allen.

"Ultimately, I don't think that Lowe's buying Rona is in the best interests of the Rona stakeholders, and I don't believe it's in the best interests of Canada," Allen said. "If history will teach us anything: American companies that buy Canadian businesses use American suppliers. They don't maintain the Canadian manufacturers and the Canadian suppliers."

The West First store is an individually owned Rona affiliate.

Target's recent acquisition of Zellers has left some rural communities, such as Salmon Arm and Fort McMurray, without a place to shop. A Lowe's takeover could cause similar problems, according to Allen.

"It'll be another Canadian company that goes American like Tim Hortons and Future Shop and Zellers."

Rona's head office is in Quebec, but a sale would have national repercussions, according to Allen.

"As much as people think that this is a Quebec problem or a Quebec company, it's not, it's a national company. We have Rona stores from Victoria all the way to the Maritimes."

While Rona has not publicly expressed any interest in the sale, Allen said another pitch from Lowe's may be in the offing.

"Do I think another offer is coming? Potentially. I think they could do another offer but I think the other offer would be rejected as well," he said.


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