Altice USA and Rogers Communications have decided to backtrack in hopes of taking control of Cogeco and its main subsidiary by raising their hostile bid by $ 800 million, which adds up to $ 11.1 billion, but this new offensive quickly resumed. rejected by the family who run the business in Quebec.
Posted Oct 18, 2020 at 6:51 PM
Updated at 8:55 PM
As it did last month, the Audet family company announced its "final refusal" to the claims of the US company and Canadian telecommunications giant, which had not filed for the terms of their proposal on September 2.
"Since Rogers and Altice do not seem to understand, we reiterate that this is not a negotiation strategy, but a definitive refusal," said Gestion Audem president and Cogeco executive president Louis Audet. We are not interested in selling our shares. "
A few hours earlier, Altice USA and Rogers had unveiled their new offensive by bidding an additional 100 million – for a total of 900 million – to convince Gestion Audem, who controls Cogeco and Cogeco Communications through its rights shares. The latter's agreement, which closed the door to a sale on September 7, is necessary for a transaction to go ahead Thanks to the shares with multiple voting rights, the Audet family has 69% of the votes in Cogeco. hands and 82.9% on the side of Cogeco Communications, whose market value is approximately 6.2 billion, although they are only & # 39; a minority of the securities in circulation.
"This revised offer provides significant added value. for all shareholders and maintains our commitment to invest $ 3 billion in Quebec over the next five years, including retaining the Cogeco brand and Cogeco headquarters in Quebec "Rogers President and CEO Joe Natale said in an emailed statement.
If it is not possible to reach a "mutually satisfactory agreement" by November 18 or if there appears to be no hope of reaching an agreement, the offer will be withdrawn, emphasizes Altice USA – subsidiary of the European conglomerate Altice. She added that the new terms "took into account comments from recent discussions" with holders of restricted shares – a signal that the US company and Rogers have been making arguments to the latter in recent weeks. .
For management expert and former Director-General of the Institute for Governance of Private and Public Organizations Michel Nadeau, the new version of the proposal does not represent a "major change".
In a telephone interview, he said he was unsure whether shareholders would be more open.
"If Rogers and Altice had wanted to shake up (the family and the boards), they would have offered a lot more," said Nadeau. By proposing 13 billion or 14 billion, it might have been different. "
The operation of the Altice USA and Rogers offering is based on sharing the assets of Cogeco and its principal subsidiary. Atlantic Broadband, now valued at $ 5.1 billion and in which the Caisse de dépôt et placement du Québec has a 21% stake, would be part of the American company. Founded in 1957, the company's Canadian operations in cable distribution, Internet services and home telephony, in addition to 23 radio stations in Quebec and Ontario, would be sold to Rogers. The new offer gives them a value of 6 billion.
For Rogers, who owns 41% and 33% of the subordinated voting shares of Cogeco and Cogeco Communications, respectively, a transaction would allow it to acquire a company whose operations are concentrated in Quebec, where it has less presence. . The company saw its attempt to buy Videotron cut short in 2000.
"Rogers has freely elected to acquire shares in companies with full knowledge of the facts," said Mr. Audet. The Audet family regrets that Rogers' decision on capital allocation causes so much suffering to the Rogers family and the board of directors.
Altice USA and Rogers are now offering $ 123 for each of the remaining subordinate shares, up from $ 106.53 initially, and $ 150 for each share of Cogeco Communications, up from $ 134.22 previously. On Friday, the Quebec company closed the Toronto Stock Exchange at $ 84.76, while that of its main subsidiary closed the week at $ 103.50.