* Move could signal more willingness to consider a sale
* Robert Chevrier replaces Robert Pare as chairman
* Rona names four other new directors
* Chevrier says Co plans to sell certain non-core assets
* Rona shares close 3.1 pct higher on the TSX
By Euan Rocha
TORONTO, Jan 21 Rona Inc named a new
executive chairman and reshuffled its board on Monday as part of
a deal with its top shareholders that will help the Canadian
hardware retailer and distributor avoid a potentially bruising
The move comes just a few months after Rona, Canada's top
distributor of hardware, home renovation and gardening products,
rebuffed an unsolicited C$1.8 billion ($1.81 billion) takeover
proposal from U.S.-based Lowe's Cos Inc.
It could signal a greater willingness to consider a sale of
the company, which has performed poorly against Lowe's and Home
Depot Inc on its home turf, analysts said.
"We view today's announcement as favorable to Rona's stock,"
said Barclays Capital analyst Jim Durran in a note. "The changes
could result in more receptive dialogue regarding potential
divestitures, or outright sale of the company."
The board changes are a precursor to bigger changes at the
company, Robert Chevrier, the new executive chairman, said in an
interview with Reuters.
Chevrier said the company plans to sell certain non-core
assets and make some "drastic moves" to address the bleed at its
Rona's Toronto-listed shares, which have fallen almost 20
percent from a 52-week high of C$14.49, closed more than 3
percent higher at C$11.86 on Monday, following the reshuffle.
Chevrier, the former chairman of distributor Richelieu
Hardware, replaces Robert Pare, who remains a board
The change is the second step in an overhaul that began late
last year when Rona sacked long-time Chief Executive Robert
Dutton and said it would sell assets and simplify operations.
Rona 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
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withdrawn in September in the face of opposition from Rona's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.
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 to work on its strategic
priorities announced in December. At the time, the company said
it would sell assets and simplify its operations as part of a
Rona said two of its board members, Alain Michel and Patrick
Palerme, have resigned, effective immediately. Two other current
directors will not stand for re-election at Rona's annual
shareholder meeting on May 14.
The company said the four new individuals joining its board,
effective immediately, are Bernard Dorval, former group head of
insurance & global development at TD Bank; Wesley Voorheis,
partner at Voorheis & Co LLP; Guy Dufresne, former president of
ArcelorMittal Mines Canada; and Barry Gilbertson, principal with
Barry Gilbertson Consultancy.
In addition, two other board members, Steven Richardson and
another nominee, will be included in the company's circular for
election at Rona's next annual general meeting of shareholders.
Rona, which is currently being led by interim CEO Dominique
Boies, said it expects to be in a position to provide an update
on its process to recruit a new CEO before the end of February.
The company said the new CEO would also be named to its board of
directors on appointment, replacing a current director.
Following the changes, the total number of Rona directors
will increase to 14 from 12, and eight of its board members will
be new directors, the company said.