Canadian retailer Rona Inc today revealed that last month it had rejected a C$1.8 billion ($1.8 billion) takeover offer from US-based Lowe's Cos Inc, the world's second-largest home improvement chain, saying that the deal was not in best interests of its shareholders.

Toronto Stock Exchange-listed Rona said that Lowe had on 6 July offered C$14.50 a share, representing a 36.7 per cent premium to the company's closing price on 6 July.

Lowe had said that its offer has the support of institutional shareholders representing about 15 per cent of Rona's stock, and proposed entering into a friendly transaction.

On 26 July, Boucherville, Quebec-based Rona informed Lowe's that its board of directors have determined that its proposal is not in the best interests of the company and its stakeholders, and requested Lowe's to not pursue a transaction that was not supported by Rona's board.

Lowe's responded two days later by saying that it still desires to proceed with a board-supported transaction and indicated that it will consider all options.

"We reiterate our proposal to the Rona board," said Lowe's CEO, Robert Niblock. "We hope ... Rona's board will reconsider and recognise that our proposal represents a very attractive opportunity for all Rona shareholders and the company's major stakeholders."

The government of Quebec immediately criticised the takeover proposal from the North Carolina-based company. "This transaction does not appear to be in the interests of either Quebec or Canada," finance minister, Raymond Bachand said in a statement released yesterday.

Boucherville, Quebec-based Rona is Canada's largest distributor and retailer of hardware, home renovation and gardening products with a 25 per cent market share.

The retailer operates a network of close to 800 corporate, franchise and affiliate stores under several banners, and a network of 14 hardware and construction materials distribution centres.

It is also a leader in the specialised plumbing and HVAC market, and has a network of nearly 60 sales outlets and four distribution centres across the country.

In total, Rona supplies nearly 1,500 sales outlets, of which some 840 are under one of its banners, as well as close to 600 clients, independent dealers, in its distribution network.

The company generated revenues of $4.8 billion in 2011.

Founded in 1946, Lowe's has grown from a small hardware store to the world's second-largest home improvement retailer behind Home Depot.

Lowe's stores stock 40,000 products in 15 product categories ranging from appliances to tools, to paint, lumber and nursery products through more than 1,745 stores in the US, Canada and Mexico.

Lowe's, a Fortune 100 company, reported revenues of $50.2 billion last year.