(QXO Inc. via Facebook)
QXO Inc. won’t raise its $5 billion offer for building products distributor GMS Inc. after Home Depot Inc. reportedly made its own bid.
A spokesman for QXO said June 20 that $5 billion is the company’s full offer. The Wall Street Journal reported June 19 that Home Depot had submitted a bid for an undetermined sum. Representatives for Home Depot and GMS declined to comment.
Home Depot ranks No. 50 on the Transport Topics Top 100 list of the largest private companies in North America.
QXO is a building products company run by veteran dealmaker Brad Jacobs, who is executive chairman of XPO and non-executive chairman of RXO and GXO Logistics.
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QXO’s unsolicited offer of $95.20 a share represented a 27% premium to GMS’ 60-day volume-weighted average, according to a statement June 18. GMS shares jumped as much as 30% in June 20 trading, touching a high of $105.14, suggesting investors expect the winning bid to be higher.
Jacobs
“QXO has a history of ‘one and done’ offers for companies while HD, in our view, may be willing to pay a higher multiple,” Keith Hughes, an analyst at Truist Securities, wrote in a research note. Truist doesn’t expect any other bidders aside from QXO and Home Depot.
Home Depot’s reported interest in GMS aligns with the retailer’s goal of expanding its market share with professional contractors, Bloomberg Intelligence analyst Drew Reading said.
Shares of QXO rose as much as 6% on June 20. Home Depot shares gained 0.8% at 11:18 a.m. in New York.
