Beacon Issues Statement in Response to QXO’s Second Extension of Unsolicited Tender Offer

Rhea-AI Summary

Beacon (BECN) has responded to QXO's second extension of its unsolicited tender offer of $124.25 per share in cash. The Board of Directors unanimously recommends shareholders NOT tender their shares, stating the offer undervalues the company and its growth prospects.

Only 19.12% of shareholders tendered their shares, showing interest in QXO's proposal. Beacon has attempted to engage with QXO to demonstrate additional value, offering both standard and buyer-friendly terms, but QXO declined to receive confidential information.

The company reports achieving record fourth quarter and full year sales, along with its highest fourth quarter Adjusted EBITDA in history, despite challenging economic conditions in 2024. Beacon clarifies it only provided guidance for FY '25, contrary to QXO's assertions about Q1 '25 guidance.

Positive

• Record Q4 and full year sales performance
• Highest Q4 Adjusted EBITDA in company history
• Strong shareholder support with 80.88% rejecting tender offer

Negative

• Challenging economic environment in 2024
• Ongoing unsolicited takeover attempt creating uncertainty

Insights

Financial Analyst

QXO's unsolicited tender offer of $124.25 per share represents approximately a 10% premium to Beacon's current share price, yet has garnered minimal shareholder support with only 19.12% of shares tendered. This tepid response strongly validates Beacon's board's unanimous assessment that the offer significantly undervalues the company.

The board's rejection is supported by Beacon's recent financial performance, having delivered record fourth quarter and full year sales, along with its highest Q4 Adjusted EBITDA in company history despite challenging economic conditions in 2024. These results suggest Beacon maintains strong operational execution and market positioning.

Particularly notable is Beacon's willingness to engage with QXO under favorable terms while QXO has reportedly declined to receive confidential information. This dynamic suggests QXO may be attempting to capitalize on temporary market conditions rather than pursuing a strategically negotiated acquisition at fair value.

The engagement of premier financial advisors (J.P. Morgan and Lazard) and legal counsel (Sidley Austin and Simpson Thacher & Bartlett) indicates Beacon is well-prepared for either continued negotiations or a potential proxy contest at the 2025 Annual Meeting. For investors, this situation creates a potential opportunity as either: (1) QXO increases its offer to reflect Beacon's intrinsic value, or (2) Beacon continues executing its growth strategy independently.

The current standoff represents a classic tension between short-term premium and long-term value creation potential, with Beacon's board clearly signaling confidence in the company's standalone prospects.

M&A Specialist

This extended tender offer represents a textbook example of initial positioning in what could become a prolonged acquisition battle. With only 19.12% of shareholders tendering—a marginal increase from the previous round—QXO faces clear evidence that its $124.25 offer is perceived as inadequate by the vast majority of Beacon's investor base.

Beacon's disclosure that they've offered engagement on "radically buyer-friendly terms" while preserving QXO's proxy contest rights reveals a sophisticated defensive strategy. By demonstrating willingness to share confidential information while QXO reportedly refuses to receive it, Beacon positions itself as reasonable and open to fair negotiation while subtly suggesting QXO may be acting opportunistically rather than seeking a value-maximizing transaction.

The board's unanimous rejection coupled with engagement of top-tier advisors indicates Beacon is preparing for all scenarios, including a potential proxy fight at the 2025 Annual Meeting. This comprehensive preparation strengthens their negotiating position regardless of QXO's next move.

Beacon's emphasis on recent financial outperformance serves dual purposes: justifying their rejection of QXO's current offer while bolstering shareholder confidence in the board's stewardship. This strategic communication aims to maintain shareholder alignment with the board's position rather than with the acquirer.

The current stalemate creates potential value for Beacon shareholders, as history shows that initial hostile offers often increase substantially or trigger competitive bidding processes when targets demonstrate strong standalone value prospects.

Beacon’s Board of Directors Continues to Reiterate Unanimous Recommendation That Beacon Shareholders NOT Tender Their Shares Into QXO’s Offer

HERNDON, Va.--(BUSINESS WIRE)-- Beacon (Nasdaq: BECN) (the “Company”) today issued the following statement regarding QXO, Inc.’s (NYSE: QXO) second extension of its unsolicited tender offer to acquire all outstanding shares of Beacon common stock for $124.25 per share in cash (the “Offer”):

For a second time, QXO has extended an Offer that represents an opportunistic attempt to take advantage of the current macro environment and acquire Beacon at a discount to its intrinsic value for the benefit of QXO but the detriment of Beacon’s shareholders.

Beacon has repeatedly offered to engage with QXO to demonstrate the additional value for which QXO’s initial offer does not fairly compensate our shareholders.

• We have offered to do this on the standard terms regularly agreed to in such cases.
• When QXO objected to those terms, we offered to engage on radically buyer-friendly terms, which included preserving QXO’s ability to run a proxy contest at our 2025 Annual Meeting if confidential discussions could not close the valuation gap.
• QXO repeatedly stated it was not interested in receiving any confidential information about the Company and its business.

Notably, only 19.12% of the shareholders tendered their shares into QXO’s offer, a small change from the tender’s prior results. There is an unmistakable message for QXO in this tepid response: the vast majority of Beacon shareholders are underwhelmed by QXO’s first and only offer.

Beacon’s Board remains open to considering all opportunities to maximize shareholder value. The Board also continues to be unanimous in its belief that the Offer significantly undervalues the Company and its prospects for growth and value creation and is not in the best interests of Beacon and its shareholders.

Beacon delivered record fourth quarter and full year sales, and the Company’s highest fourth quarter Adjusted EBITDA in history, despite the challenging economic environment in 2024. Contrary to what QXO asserted in its press release earlier today, Beacon notes that, during the Company’s recent Q4 and FY ‘24 earnings call, it provided guidance for only FY ’25. The Company provided no guidance with respect to 1Q25 Adjusted EBITDA.

Additional information related to QXO’s unsolicited tender offer is available at www.BeaconBuildsValue.com.

J.P. Morgan is serving as financial advisor to the Company and its Board, and Lazard is serving as financial advisor to the Board. Sidley Austin LLP and Simpson Thacher & Bartlett LLP are serving as legal advisors to Beacon.

About Beacon

Founded in 1928, Beacon is a publicly-traded Fortune 500 company that distributes specialty building products, including roofing materials and complementary products, such as siding and waterproofing. The company operates over 580 branches throughout all 50 states in the U.S. and 7 provinces in Canada. Beacon serves an extensive base of nearly 110,000 customers, utilizing its vast branch network and service capabilities to provide high-quality products and support throughout the entire project lifecycle. Beacon offers its own private label brand, TRI-BUILT ®, and has a proprietary digital account management suite, Beacon PRO+ ®, which allows customers to manage their businesses online. Beacon’s stock is traded on the Nasdaq Global Select Market under the ticker symbol BECN. To learn more about Beacon, please visit http://www.becn.com.

Forward-Looking Statements

This communication contains statements that may constitute forward-looking statements. These statements include, but are not limited to: statements related to the Company’s views and expectations regarding the Offer from QXO; any statements relating to the plans, strategies and objectives of management or the Company’s Board for future operations and activities; any statements concerning the expected development, performance, market share or competitive performance relating to products or services; any statements regarding current or future macroeconomic trends or events and the impact of those trends and events on the Company and its financial performance; and any statements of assumptions underlying any of the foregoing. Forward-looking statements can be identified by the fact that they do not relate strictly to historic or current facts and often use words such as “anticipate,” “estimate,” “expect,” “believe,” “will likely result,” “outlook,” “project” and other words and expressions of similar meaning. Investors are cautioned not to place undue reliance on forward-looking statements. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including, but not limited to, those set forth in the “Risk Factors” section of the Company’s Form 10-K for the fiscal year ended December 31, 2024, and subsequent filings with the U.S. Securities and Exchange Commission (the “SEC”). In addition, actual results may differ materially from those indicated in any forward-looking statements as the result of: factors relating to the Offer, including actions taken by QXO in connection with the Offer, actions taken by the Company or its stockholders in respect of the Offer, and the effects of the Offer, or the completion or failure to complete the Offer, on the Company’s businesses, or other developments involving QXO; product shortages; changes in supplier pricing and rebates; inability to identify acquisition targets or close acquisitions; difficulty integrating acquired businesses; inability to identify new markets or successfully open new locations; catastrophic safety incidents; cyclicality and seasonality; IT failures or interruptions, including as a result of cybersecurity incidents; goodwill or intangible asset impairments; disruptions in the capital and credit markets; debt leverage; loss of key talent; labor disputes; and regulatory risks. The Company may not succeed in addressing these and other risks. Consequently, all forward-looking statements in this communication are qualified by the factors, risks and uncertainties referenced above and readers are cautioned not to place undue reliance on forward-looking statements. In addition, the forward-looking statements included in this communication represent the Company’s views as of the date of this communication and these views could change. However, while the Company may elect to update these forward-looking statements at some point, the Company specifically disclaims any obligation to do so, other than as required by federal securities laws. These forward-looking statements should not be relied upon as representing the Company’s views as of any date subsequent to the date of this communication.

Important Information for Investors and Stockholders

This communication does not constitute an offer to buy or solicitation of an offer to sell any securities. The Company has filed a solicitation/recommendation statement on Schedule 14D-9 with the SEC. Any solicitation/recommendation statement filed by the Company that is required to be mailed to stockholders will be mailed to stockholders. THE COMPANY’S INVESTORS AND STOCKHOLDERS ARE STRONGLY ENCOURAGED TO READ THE COMPANY’S SOLICITATION/RECOMMENDATION STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ALL OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and stockholders may obtain a copy of the solicitation/recommendation statement on Schedule 14D-9, any amendments or supplements thereto and other documents filed by the Company with the SEC at no charge at the SEC’s website at www.sec.gov. Copies will also be available at no charge by clicking the “SEC Filings” link in the “Financials & Presentations” section of the Company’s website, https://ir.beaconroofingsupply.com/, or by contacting Binit.Sanghvi@becn.com as soon as reasonably practicable after such materials are electronically filed with, or furnished to, the SEC.

Important Additional Information

The Company intends to file a proxy statement on Schedule 14A, an accompanying BLUE proxy card, and other relevant documents with the SEC in connection with such solicitation of proxies from the Company’s stockholders for the Company’s 2025 Annual Meeting of Stockholders. THE COMPANY’S STOCKHOLDERS ARE STRONGLY ENCOURAGED TO READ THE COMPANY’S DEFINITIVE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO), THE ACCOMPANYING BLUE PROXY CARD, AND ALL OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and stockholders may obtain a copy of the definitive proxy statement, an accompanying BLUE proxy card, any amendments or supplements to the definitive proxy statement and other documents filed by the Company with the SEC at no charge at the SEC’s website at www.sec.gov. Copies will also be available at no charge by clicking the “SEC Filings” link in the “Financials & Presentations” section of the Company’s website, https://ir.beaconroofingsupply.com/.

Participants in the Solicitation

The Company, each of its independent directors (Stuart A. Randle, Barbara G. Fast, Alan Gershenhorn, Melanie M. Hart, Racquel H. Mason, Robert M. McLaughlin, Earl Newsome, Jr., Neil S. Novich, and Douglas L. Young) and certain of its executive officers (Julian Francis, President & Chief Executive Officer and Prithvi Gandhi, Executive Vice President & Chief Financial Officer) are deemed to be “participants” (as defined in Schedule 14A under the Exchange Act of 1934, as amended) in the solicitation of proxies from the Company’s stockholders in connection with matters to be considered at the Company’s 2025 Annual Meeting of Stockholders. Information about the names of the Company’s directors and officers, their respective interests in the Company by security holdings or otherwise, and their respective compensation is set forth in the sections entitled “Information About our Nominees,” “Compensation of Directors,” “Information on Executive Compensation” and “Stock Ownership” of the Company’s Proxy Statement on Schedule 14A in connection with the 2024 Annual Meeting of Stockholders, filed with the SEC on April 3, 2024 (available here), the Company’s Annual Report on Form 10-K filed with the SEC on February 27, 2025 (available here) and the Company’s Current Report on Form 8-K filed with the SEC on April 23, 2024 (available here). Supplemental information regarding the participants’ holdings of the Company’s securities can be found in SEC filings on Statements of Change in Ownership on Form 4 filed with the SEC on May 28, 2024 and May 17, 2024 for Mr. Randle (available here and here); May 17, 2024 for Ms. Fast (available here); May 17, 2024 for Mr. Gershenhorn (available here); May 17, 2024 for Ms. Hart (available here); May 17, 2024 for Ms. Mason (available here); May 17, 2024 for Mr. McLaughlin (available here); May 17, 2024 for Mr. Newsome (available here); May 17, 2024 for Mr. Novich (available here); May 17, 2024 for Mr. Young (available here); May 22, 2024 for Mr. Francis (available here); and August 8, 2024 and May 21, 2024 for Mr. Gandhi (available here and here). Such filings are also available on the Company’s website at https://ir.beaconroofingsupply.com/financials-and-presentations/sec-filings.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250304988500/en/

Beacon Contacts:

Media

Jennifer Lewis

VP, Communications and Corporate Social Responsibility

Jennifer.Lewis@becn.com

571-752-1048

Ed Trissel / Andrea Rose

Joele Frank, Wilkinson Brimmer Katcher

212-355-4449

Investors

Binit Sanghvi

VP, Capital Markets and Treasurer

Binit.Sanghvi@becn.com

972-369-8005

Bruce Goldfarb / Pat McHugh

Okapi Partners LLC

888-785-6673

212-297-0720

info@okapipartners.com

Source: Beacon

FAQ

What is QXO's current tender offer price for Beacon (BECN) shares?

QXO is offering $124.25 per share in cash for all outstanding Beacon shares.

What percentage of Beacon (BECN) shareholders have tendered their shares to QXO's offer?

19.12% of Beacon shareholders have tendered their shares, showing minimal change from previous results.

How did Beacon (BECN) perform in Q4 and FY 2024?

Beacon achieved record fourth quarter and full year sales, along with its highest Q4 Adjusted EBITDA in history.

Why is Beacon's Board recommending against QXO's tender offer?

The Board believes the offer significantly undervalues the company and its growth prospects, stating it's not in the best interests of Beacon and its shareholders.