Rexel rejects undervalued QXO bid, shares rise By Investing.com

Investing.com — Shares of Rexel (EPA: ) jumped Monday after the company said it rejected an unsolicited preliminary offer from QXO (NASDAQ: ) .

At 4:40 am (0840 GMT), Rexel was trading 9.9% higher at €25.25.

The offer, which was priced between 28.00 and 28.40 euros per share, was considered by Rexel’s board of directors to be undervaluing the company.

“Rexel’s board of directors reviewed the proposal in detail and unanimously decided not to proceed with it, believing it significantly undervalues ​​the company,” the company said in a statement.

This initial offer represents a premium of more than 23% to last Friday’s closing price, but falls short of Rexel’s 2024 peak share price and the company’s estimated standalone fair value.

“We see a significant growth trajectory at Rexel, both organically and through M&A, particularly in the US, and believe Rexel is well positioned to capitalize on this growth,” Citi Research analysts said in a note .

Analysts at Berenberg note that Rexel’s management team has a proven track record of delivering shareholder value, with shares up 114% over the past five years.

This is due to Rexel’s accelerated organic growth, strong margin expansion, well-executed M&A strategy and improved ROCE and balance sheet position.

JP Morgan also pointed out that while Rexel’s rejection of QXO’s offer was justified, the company’s positioning and strong balance sheet offer significant opportunities for future value creation.

Despite potential risks, particularly related to macroeconomic factors and sector-specific challenges, Rexel shares are expected to perform well and remain a focal point for investors.