Author: Anshuman Tripathy

(Reuters) – Beacon Roofing Supply on Wednesday rejected an $11 billion takeover bid from QXO, a recent player in the building products distribution industry, saying its proposal “significantly undervalues” the roofing supplier.

Earlier Wednesday, QXO CEO and billionaire Brad Jacobs made public a $124.25-a-share offer for Virginia-based Beacon and threatened a proxy fight over the takeover target after months of trying to strike a deal.

QXO, whose board member includes President-elect Donald Trump’s son-in-law, Jared Kushner, wants to enter the massive but fragmented construction products distribution industry.

This $800 billion industry includes a variety of materials such as roofing, insulation and other building components.

QXO shares fell 1.6% in afternoon trading Wednesday, while Beacon shares hit a record high of $121.22 but fell compact of the $124.25 per share offering price.

The offer price represents a premium of 26% to Beacon’s closing price on November 15, the last trading day before reports emerged about the QXO approach.

Jacobs said he and QXO CFO Ihsan Essaid first approached Beacon in July and made numerous attempts to reach an agreement but were met with “delays, cancellations and unreasonable preconditions, most notably a ‘long-term’ shutdown.”

On Wednesday, Beacon responded that it had offered to cooperate “on numerous occasions,” including discussing pricing, provided only a “standard non-disclosure agreement.”

“We are ready to appoint directors to the Beacon Board. We believe your shareholders have the right to evaluate our proposal,” added Jacobs, whose net worth is estimated at $9.3 billion according to Forbes.

Beacon, which has a market value of $6.74 billion, is the largest publicly traded distributor of roofing and complementary building products in the U.S. and Canada, according to its website.

QXO has about $5 billion in cash on hand and has secured enough financial commitments to pay 100% of the purchase amount, Jacobs said.