Updated at 7:41 a.m. | Updated at 8:42 a.m.

Ahead of QXO’s 5 p.m. Monday deadline for Beacon to accept the all-cash tender offer initially made last fall to acquire the Herndon, Va.-based distributor of roofing and exterior building supplies, a joint statement released early this morning confirmed the two companies will begin negotiations.

“QXO, Inc. and Beacon Roofing Supply, Inc. confirmed today that they are in discussions about a potential combination in which QXO would acquire Beacon for $124.35 per share in cash, or total consideration of approximately $11 billion,” the brief statement said.

A spokesman for QXO confirmed the news but cautioned that while the talks are “friendly,” they do not mean a deal is done.

“QXO is confident it can double the EBITDA of Beacon over the next five years and the price offered, $124.35, represents 10.8 times Beacon’s consensus, full year, 2025 EBITDA and 10.1 times Beacon’s consensus, full year, 2026 EBITDA,” the spokesman said.

The QXO representative added that, should the deal materialize, Beacon would be the “ideal” first of several acquisitions its founder, Brad Jacobs, has planned for the future company.

“If we come to an agreement with Beacon, we expect it to be the first of many acquisitions for QXO,” the representative said. 

“It will put us on that pathway to our stated goal of $50 billion in revenue as we enter the building products industry; it's the second largest distributor of roofing products, which is, as you know, is a $70 billion to $80 billion industry; we're highly confident that the playbook we've used in waste management, rental equipment and transportation is completely applicable to Beacon.” 

On March 4, QXO extended its all-cash tender offer to acquire outstanding shares of Beacon at $124.25 per share. QXO then announced commitments for over 19% of the required shares, an 11% increase from the Feb. 24 deadline, though still short of its necessary threshold.

Since the extension announcement, financial news has become increasingly less optimistic about the board of directors' ability to hold the line and convince shareholders to reject QXO’s offer.

A day before Jacobs extended QXO’s offer, CNBC’s Jim Kramer, host of the financial show “Squawk on the Street” — who had interviewed Beacon CEO Julian Francis on Feb. 25  — was quoted as saying of QXO’s management: “They're gonna win. Yes, I think that Brad Jacobs is going to win. I'm saying it right here."

Taking it to the Rank and File

Last Friday, after the markets closed, Jacobs posted an open letter to Beacon’s employees and executives on his LinkedIn page, acknowledging the uncertainty surrounding QXO’s potential acquisition of Beacon.

The entrepreneur sought to reassure employees that their voices would be a priority should the deal proceed, emphasizing that QXO’s concerns are with board-level decisions, not the workforce. 

“Let me also be clear — our beef with Beacon is not with the employees,” he wrote. “It’s about the decisions being made at the board level. We have tremendous respect for the entire team that has built this company and for the dedication you bring to it every day.” I

He stated if QXO acquires Beacon, he plans to engage in a listening tour to gather insights on what works well and where improvements can be made to strengthen the company.

Jacobs' complete statement can be read HERE.

Where the markets stand ahead of Monday’s open

Ketan Mamtora of BMO Capital Markets, one of the most bullish analysts on Beacon’s long-term share price prospects, had previously set a target share price of $136 — well above Beacon’s 52-week high of $121.42 or the 90-day unaffected volume-weighted average price (VWAP) of $91.02 that QXO used as a baseline — but has since lowered the target to $130. 

That figure is still the second highest among the 10 analysts MarketBeat tracks in setting its consensus price. Benchmark’s Reuben Garner pegs the target price at $140, set on March 3, but that figure is an outlier; Garner maintains a buy recommendation.

The most conservative bank, Truist Financial, continues to have a target price between $90 and $95 and has issued a hold rating. Over the previous 90 days, analysts downgraded Beacon’s stock twice.

According to the latest data from MarketBeat, one analyst has rated the stock with a sell rating, four have given a hold rating and six have a buy rating. Beacon currently has an average rating of "Hold." 

The 10 analysts' twelve-month price targets for Beacon average $119.95, representing a forecasted upside of 7.97% from the stock’s last price of $111.10, down $0.93 at the close of trading Friday. 

That figure was still 11.84% lower than QXO’s offer, which has since been raised by $0.10.

As the World Turns

Beacon is, of course, one of the roofing and exterior building materials distribution space’s "Big 3" supplier-distributors, alongside ABC Supply Co. and SRS Distribution. These bellwether companies enjoy approximately 60% to 70% of the industry’s total market share. 

For the past four months, Beacon’s board of directors has been involved in a protracted struggle for control of the $7 billion company, which was founded in 1928 and based in Herndon, Va., as the startup QXO, founded last October by billionaire Brad Jacobs, sets its sights on the distributor. 

News of the pursuit first slipped into the public eye following The Wall Street Journal's scoop last fall, when it broke the story on Nov. 18, 2024.

Since then, the back-and-forth between Jacobs and Beacon’s Chairman, Stuart A. Randle and company CEO Francis, has often resembled what one observer noted was reminiscent of a 1980s evening soap opera, citing “Dynasty” as their example.

This is a developing story.