Rona buys back C$283M of its debentures in modified Dutch auction offer, withdraws second offer because of success of initial offer

Cindy Allen

BOUCHERVILLE, Quebec , November 29, 2011 (Rona) – RONA inc. (“RONA”) (TSX: RON, RON.PR.A) announced today the expiration and results of the first offer (“Offer 1”) of its previously announced Offers (as defined below). Offer 1, which has been conducted as a modified “Dutch Auction”, expired at 5:00 p.m., Montreal time, on November 28, 2011.

As announced on November 3, 2011, Offer 1 was the first of two successive offers to purchase for cash (collectively, the “Offers”), a portion of RONA’s 5.40% Debentures due October 20, 2016 (Unsecured) (the “Debentures”). The terms and conditions of both Offers are set out in the offers to purchase of RONA dated November 3, 2011 (as they may be amended or supplemented from time to time, collectively the “Offer to Purchase”) and the related Letter of Transmittal. Capitalized terms used and not defined herein have the meanings given to them in the Offer to Purchase.

RONA received tenders for $283,171,000 aggregate principal amount of Debentures pursuant to Offer 1 on or prior to 5:00 p.m., Montreal time, on November 28, 2011. Based on the terms of Offer 1, as extended and increased on November 22, 2011, RONA accepted $283,171,000 aggregate principal amount of Debentures for purchase in Offer 1.

Based on the terms of Offer 1, the Offer 1 Consideration is determined to be $1,022.73 per $1,000 principal amount of Debentures, resulting in aggregate consideration of $289,607,477 (plus an additional $5,613,780 in aggregate accrued interest). RONA expects to make payment for the accepted Debentures on December 1, 2011.

Holders who validly tendered their Debentures on or prior to 5:00 p.m., Montreal time, on November 28, 2011 and whose Debentures are purchased pursuant to Offer 1 will receive the Offer 1 Consideration shown above for each $1,000 principal amount of such Debentures. In addition, holders who validly tendered Debentures under Offer 1 and that are accepted for purchase by RONA will receive a cash payment representing the accrued and unpaid interest on those Debentures from the last interest payment date to, but not including, the settlement date.

Given the success of Offer 1, Offer 2 is hereby withdrawn and will not be completed as contemplated by the Offer to Purchase.

RONA has retained Scotia Capital Inc. to act as Dealer Manager for the Offers. Computershare Investor Services Inc. has been retained to act as the depositary for the Offers and Kingsdale Shareholder Services Inc. has been retained to act as the information agent for the Offers. For additional information regarding the terms of the Offers, please contact Scotia Capital Inc. at 1-888-776-3666 or 1-416-863-7257. Requests for documents and questions regarding the tendering of Debentures may be directed to either Computershare Investor Services Inc. at 1-800-564-6253 or 1-514-982-7555 or Kingsdale Shareholder Services Inc. at 1-866-851-2743 or 1-416-867-2272.

This Press Release does not constitute an offer to sell or purchase, or a solicitation of an offer to sell or purchase, or the solicitation of tenders or consents with respect to, the Debentures. No offer, solicitation, purchase or sale will be made in any jurisdiction in which such an offer, solicitation, or sale would be unlawful. The Offers are being made solely pursuant to the Offer to Purchase made available to holders of the Debentures. None of RONA, the Dealer Manager, the Depositary, the Information Agent or their respective affiliates is making any recommendation as to whether or not holders should tender all or any portion of their Debentures in the Offers. Holders are urged to evaluate carefully all information in the Offer to Purchase, consult their own investment and tax advisors and make their own decisions whether to tender Debentures, and, if so, the principal amount of Debentures and the Bid Price at which to tender.

Forward-looking statements
This Press Release includes “forward-looking statements” that involve risks and uncertainties. All statements other than statements of historical facts included in this Press Release, including statements regarding prospects, plans, financial position and business strategy of RONA, or concerning the amount of Debentures to be purchased in the Offers and the date of payment thereof, may constitute forward-looking statements within the meaning of the Canadian securities legislation and regulations. Investors and others are cautioned that undue reliance should not be placed on any forward-looking statements. The forward-looking statements in this Press Release reflect RONA’s expectations as at November 28, 2011, and are subject to change after this date. RONA expressly disclaims any obligation or intention to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by the applicable securities laws. For more information on the risks, uncertainties and assumptions that would cause RONA’s actual results to differ from current expectations, please also refer to RONA’s public filings available at www.sedar.com and www.rona.ca. In particular, further details and descriptions of these and other factors are disclosed in the MD&A under the “Risks and uncertainties” section and in the “Risk factors” section of RONA’s current Annual Information Form.

About RONA
RONA is the largest Canadian distributor and retailer of hardware, home renovation and gardening products. RONA operates a network of more than 950 corporate, franchise and affiliate stores of various sizes and formats. With close to 30,000 employees working under its family of banners in every region of Canada and more than 17 million square feet of retail space, the RONA store network generates over $6 billion in annual retail sales. For more information, please visit www.rona.ca.

* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.