Canada's Rona Inc bows to investor pressure, shuffles board
has grown rapidly in the last three decades through a series of acquisitions but stumbled in recent years as Home Depot and Lowe's, respectively the world's No. 1 and No. 2 home improvement chains, have stepped up competition in the Canadian market.
Rona, based in Boucherville, Quebec, also named four other new board members on Monday, following an agreement with its two top shareholders; Quebec's public pension fund manager Caisse de depot et placement du Quebec, and fund manager Invesco Canada.
Invesco had publicly backed Lowe's bid for Rona, which was withdrawn in September in the face of opposition from Rona's board, provincial politicians in Quebec and from many of Rona's independent dealers. Caisse took no public position on the deal except to announce a marginal increase in its Rona shareholding.
In November, Invesco publicly called for the removal of Rona's board and outlined plans to requisition a shareholder meeting. Invesco, however, had yet to name a slate of nominees for election to Rona's board.
Rona said both Caisse and Invesco have now agreed to back its slate of nominees at a shareholder meeting in May. The two investors together own almost 27 percent of Rona's outstanding shares, according to the latest Thomson Reuters data.
BOARD CHANGES
Investors grew more vocal about the need for change at Rona, after it reported another set of weak results in November, on the heels of a string of sales declines at established stores.
Rona said on Monday it has also retained the services of a top global management consulting firm
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