GMS Inc. (GMS) Stock: Bidding War Emerges as Home Depot Challenges QXO's $5 Billion Offer

TLDR

Table of Contents

Home Depot has submitted a takeover bid for building-products distributor GMS, creating a potential bidding war with QXO
QXO already offered $95.20 per share ($5 billion) for GMS on Wednesday, led by serial dealmaker Brad Jacobs
GMS shares jumped 25% in premarket trading to $101.25 following the Home Depot bid report
GMS operates over 320 distribution centers and 100 tool rental locations across residential and commercial markets
Home Depot previously acquired SRS Distribution for $18.25 billion last year, showing appetite for building supply acquisitions

GMS shares rocketed higher in premarket trading Friday after reports emerged that Home Depot has entered the race to acquire the building-products distributor. The development sets up a potential bidding war with QXO, which submitted its own $5 billion offer earlier this week.

The Wall Street Journal reported Home Depot’s interest, citing people familiar with the matter. The home improvement giant has not responded to requests for comment about the reported bid.

Home Depot’s exact offer price remains unclear. However, the company will need to exceed QXO’s Wednesday proposal of $95.20 per share to win the deal.

Home Depot Inc. has made an offer for GMS Inc., potentially setting off a bidding war with QXO Inc. which this week made a $5 billion offer for the building-products distributor, the Wall Street Journal reported Thursday https://t.co/ZHdbpGUlKA
— Bloomberg (@business) June 19, 2025

QXO’s bid values GMS at approximately $5 billion. The offer came from the buildings-product distributor led by Brad Jacobs, known for his track record in dealmaking.

GMS shares surged 25% to $101.25 in premarket trading following the Home Depot news. The stock has already gained ground in recent weeks on acquisition speculation.

Home Depot shares dipped 0.6% in premarket activity. QXO stock rose 3.4% as investors weighed the competitive dynamics.

Competition Heats Up

GMS confirmed receiving QXO’s unsolicited proposal and said it would review the offer. The Georgia-based company has become a prime takeover target as firms seek exposure to housing demand.

The distributor operates more than 320 distribution centers nationwide. It also runs about 100 tool sales, rental and service centers serving both residential and commercial customers.

GMS holds the position as the largest publicly-traded distributor of wallboard, ceiling tiles, and steel framing products. The company has 45% exposure to residential properties and 55% to commercial real estate.

Home Depot has shown appetite for building supply acquisitions recently. Last year, the retailer closed a deal to acquire SRS Distribution for $18.25 billion including debt.

Strategic Positioning

The SRS deal demonstrated Home Depot’s strategy to capture more spending from contractors and construction businesses. Professional customers represent a key growth area for the retailer.

Wolfe Research analysts suggested a bidding war may not materialize if Home Depot’s offer exceeds QXO’s bid. They cited QXO’s commitment to price discipline in mergers and acquisitions.

The analysts noted that QXO typically maintains strict valuation criteria when pursuing deals. This approach could limit how high the company is willing to go in a bidding contest.

GMS currently carries a market capitalization of $3.1 billion based on its recent trading levels. The company supplies tools and building materials to both consumers and professional contractors.

Both potential buyers see value in GMS’s distribution network and customer relationships. The company’s geographic footprint provides access to key construction markets across the country.

The timing reflects ongoing demand for building materials despite economic uncertainty. Companies continue investing in distribution capacity to serve housing and commercial construction needs.

Home Depot’s interest validates the strategic value of GMS’s operations and market position. The retailer views building supply distribution as complementary to its core home improvement business.

GMS shares have risen on acquisition speculation in recent weeks, trading above $80 before QXO’s formal offer. The stock now trades well above that level as bidding interest intensifies.

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