November 15, 2012

Rona puts up legal barrier to Invesco board challenge

Interview with Yvan Allaire | Financial Post

“[…] Invesco bought the bulk of its current Rona stake in May 2007 at a price varying between $17.10 and $17.75 per share so its current state of mind is understandable given the share drop since then, said Yvan Allaire, executive chair of Montreal’s Institute for Governance of Private and Public Organizations.

Still, Invesco backed Rona’s board last May even as the share price plumbed historic lows, Mr. Allaire noted. The reason it opposes the board now is that there’s a willing suitor to buy Rona, namely Lowe’s, giving it a chance to recoup some of its investment.

Regardless, the complete ouster of Rona’s entire board is unwarranted, said Mr. Allaire. “It’s as if nobody on the board merits that we keep their experience and knowledge of the company and its circumstances.”

Rona has not received a formal request for a meeting from Invesco, said Rona spokeswoman Michelle Laberge.

The fact it called the annual meeting for next May on Wednesday changes nothing because even under the obligation of the request, Rona would have the power to pick any date for a shareholder meeting before June next year, she said.

Ms. Laberge said that Rona wants to avoid a proxy fight. Company chairman Robert Paré has been intensifying the number of meetings with shareholders in recent days in an attempt to address concerns about the company’s performance, she said.

Head-hunting firm Korn/ Ferry International, which Rona hired to find a new CEO after the dismissal of Robert Dutton last week, also has a mandate to help search for board member candidates, Ms. Laberge said.

Rona has been criticized in the past, most recently at its annual meeting this past summer, for having a Quebec-centric board despite the fact it operates Canada-wide. Only one of its 11 current directors, James Pantelidis, is based outside the province.” Read more