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Beacon Roofing Supply (BECN) trades relatively flat today after QXO (QXO) confirmed its $11 bln tender offer to acquire the building products distributor. QXO provides consulting and professional services, aiming to become a leader in the building products distribution industry through accretive acquisitions and organic growth. Part of QXO's strategy involves disrupting the nascent use of technology within the building products distribution industry, particularly AI and B2B e-commerce. As a result, QXO sees BECN as an excellent fit for its long-term vision.

• Rumors of the deal already broke out in November, pushing BECN to all-time highs. Then, earlier this month, QXO made public a deal to acquire all outstanding shares of BECN for $124.25 each in cash, triggering another wave of buying and pushing BECN to new record highs. At the time, BECN rejected the unsolicited proposal from QXO, which was to purchase. Despite the rejection, shareholders were relatively confident that the deal would go through.
• Today, QXO announced it would commence an all-cash tender offer to acquire BECN at the previously announced price, implying a roughly 37% premium above the stock's 90-day VWAP of $91.02. Still, given market participants' previous confidence in the deal closing, BECN is not seeing much additional appreciation today. QXO reiterated that it will pursue all options to complete the transaction, including nominating directors that would favor the deal at BECN's annual shareholder meeting.
• Meanwhile, QXO's shares are encountering some turbulence. Although, part of this could be due to today's broader market pullback. QXO has flatlined since plummeting last July following a $3.5 bln private placement composed of stock and warrants.

QXO has recently tried to acquire a building-products distributor, offering €28.00 to €28.40 per share for Rexel SA (RXEEY) in September, only for Rexel to reject the unsolicited proposal. Last week, BECN reportedly started turning to other suitors in an attempt to repel the takeover from QXO. Therefore, nothing is set in stone yet. BECN commented that it will evaluate QXO's tender offer. However, since the deal is no different than the one BECN rejected in November, noting that it significantly undervalued the company, QXO may have to up the ante.