By Anshuman Tripathy
(Reuters) -Beacon Roofing Supply on Wednesday rejected a $11 billion takeover offer from QXO, a new player in the building products distribution industry, saying its proposal "significantly undervalues" the roofing material supplier.
Earlier on Wednesday, QXO CEO and billionaire Brad Jacobs made public its $124.25 per share offer for Virginia-based Beacon and threatened a proxy fight at the takeover target after months of attempting to strike a deal.
QXO, which counts President-elect Donald Trump's son-in-law Jared Kushner as a board member, is looking to enter the massive but fragmented building products distribution industry.
This industry, worth $800 billion, encompasses various materials such as roofing supplies, insulation and other building components.
Shares of QXO fell 1.6% in afternoon trade on Wednesday, while shares of Beacon hit a record of $121.22 but failed to hit the offer price of $124.25 per share.
The offer price represents a premium of 26% to Beacon's closing price on Nov. 15, the last trading day before reports emerged about QXO's approach.
Jacobs said he and QXO's CFO Ihsan Essaid first approached Beacon in July and made numerous attempts to reach a deal but were met with "delays, cancellations, and unreasonable preconditions, notably a 'long-term' standstill".
Beacon responded on Wednesday saying it offered on "'multiple occasions' to engage, including to discuss price, subject only to a 'standard non-disclosure agreement'".
"We are prepared to nominate directors to the Beacon Board. We believe your shareholders have the right to evaluate our proposal," added Jacobs, whose net worth is pegged at $9.3 billion by Forbes.
Beacon, with a market value of $6.74 billion, is the largest publicly traded distributor of roofing materials and complementary building products in the U.S. and Canada, according to its website.
QXO has about $5 billion of cash on hand and has secured financing commitments sufficient to pay 100% of the purchase consideration, Jacobs said.