An interesting M&A dance is taking place on the cable side of things over the last day or two. Rogers Communications and Altice USA have made a play for Cogeco and Cogeco Communications, however it started out complicated and it’s swiftly getting more so.
Altice USA would like to buy the companies for a total of $7.8B, but just keep their US assets which run under the Atlantic Broadband name. Those assets along the US east coast would fit nicely with their current holdings.
Altice would therefore then flip the Canadian assets to Rogers Communications in a deal valuing them at $4.9B. Rogers already owned a minority stake in Cogeco, and has long desired to own the whole thing. Under the terms of this deal, they would be paying a net of $3.4B cash to do it.
However, the deal of course is conditional upon the Altice purchase in the first place, and therein lies the rub. For their part, Cogeco and Cogeco Communications, which are both majority owned by the Audet family, announced yesterday that they had received the unsolicited bid. Another company owned by the Audet family, Gestion Audem Inc, reviewed the deal with disfavor, and the two companies’ independent board members then joined in rejecting the bid from Altice and Rogers.
The Altice proposal went to some lengths to please the Audet family, but the latter were apparently not sufficiently impressed – or at least haven’t been yet. It’s not clear whether the rejection stems from financial terms or from internal Canadian political opposition to having a Quebec-based business bought out by an Ontario one.
I’d guess that there’s probably a bit of both mixed in somewhere I’d guess, but it’s opaque thus far. Hence, it’s not yet clear if this dance is over yet. I’d guess not, but who knows.
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