Day-to-day business continues at a Cogeco location in LimeRidge Mall in Hamilton on Sept. 30, 2020.Glenn Lowson/The Globe and Mail
A hostile takeover bid for Quebec-based cable operator Cogeco Inc. Cogeco has expired, with the chief executive of Rogers Communications Inc. Rogers saying he is disappointed the family that controls the company was unwilling to discuss the proposed $11.1-billion offer.
The proposed takeover would have seen Rogers snap up Cogeco’s Canadian operations while New York-based Altice USA Inc. Altice USA would have purchased the U.S. cable business, Atlantic Broadband.
After the bid was made, Cogeco executive chairman Louis Audet repeatedly stated that Cogeco Inc. and subsidiary Cogeco Communications Inc. are not for sale. The deal had hinged on the support of the Audet family, which controls the companies through multiple voting shares. (The family owns 69 per cent of the voting rights at Cogeco but just 3.3 per cent of the equity.)
“We’re disappointed that we didn’t get the ability to engage with either the Audet family or the Cogeco boards on what is a terrific offer,” Rogers CEO Joe Natale said during an RBC Capital Markets virtual conference on Wednesday.
“But it just wasn’t meant to be. There wasn’t any appetite to follow through or pursue it on their part.”
A spokesperson for Altice said the company does not plan to extend the offer. “We remain committed to our growth strategy and continue to focus on opportunities to drive value for our shareholders,” Lisa Anselmo said in an e-mail.
Rogers is Cogeco’s largest shareholder, owning about a third of the equity in both companies, a position that the company has built up over the past two decades. Analysts had predicted that Toronto-based Rogers would sell its Cogeco shares, which are worth approximately $1.5-billion, if the deal was unsuccessful.
Mr. Natale said Wednesday that Rogers is in the midst of making spending decisions around the deployment of fifth-generation wireless networks as well as expanding its fibre internet footprint in various parts of the country.
“We’ll go back to our board and have a discussion around the next steps, look at our capital-allocation priorities as a business and move forward,” Mr. Natale said.
“In the meantime, we continue to leverage the business we do have in Quebec. We’ve been there for 35 years, and we’re going to continue to build that business.”
The offer had drawn opposition from Quebec Premier François Legault, who expressed concerns about losing Cogeco’s Montreal headquarters. In an effort to alleviate those worries, Rogers had promised to keep Cogeco’s headquarters and management team in the province if the bid had been successful.
Rogers had also vowed to invest $3-billion in Quebec, including on upgrading networks and building a 300-employee tech-innovation hub in the province.
Although some of that $3-billion was related to the proposed transaction and will not be spent, Rogers is still planning to invest significantly in the province, according to a person familiar with the issue. Those investments include building out its infrastructure, such as fifth-generation wireless networks, said the source, who The Globe and Mail is not identifying because they are not authorized to speak publicly about the matter.
Cogeco spokesperson Marie-Hélène Labrie said the company is focusing on growing its business and “building long-term value for all our stakeholders.”
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