Canadian/US communications group Cogeco announced yesterday (2 September 2020) that the boards of directors of holding company Cogeco Inc. and subsidiary Cogeco Communications have rejected an unsolicited, non-binding takeover proposal from cableco Altice USA and Canadian counterpart Rogers Communications. Cogeco’s statement said that the rejection followed discussions with members of the group’s controlling shareholders, the Audet family.
Altice presented an offer to acquire 100% of shares in the Cogeco group and sell its Canadian assets – including cableco Cogeco Connexion – to Rogers, which is an existing minority shareholder in Cogeco, whilst Altice would take sole ownership of the target group’s US cableco, Atlantic Broadband. The deal is worth an aggregate value of approximately USD7.8 billion, including shares currently owned by Rogers and around USD3.6 billion to be paid by Altice for Atlantic Broadband. In a separate statement, Rogers said it would pay a net cash consideration of CAD3.4 billion (USD2.6 billion) for the Canadian assets, reflecting a gross price of CAD5.5 billion minus the CAD1.5 billion current value of Rogers’ Cogeco stake and a CAD600 million share premium.
Atlantic Broadband operates across eleven east coast US states, adjacent to the existing footprint of Altice USA’s Suddenlink and Optimum units, which Altice acquired in 2015/16. In its most recent acquisition, in July this year Altice bought New Jersey-based Service Electric Cable TV.
Quebec-headquartered Cogeco Connexion’s cable broadband network serves the francophone province and neighbouring Ontario. As reported by Bloomberg, a political aspect surfaced yesterday regarding the buyout offer from larger Ontario-based rival Rogers, with Quebec premier Francois Legault expressing his opposition to the deal in a radio interview. Legault stated: ‘It is out of the question to let this Quebec company move its head office to Ontario … We talked this morning with [Cogeco executive chairman] Louis Audet, we speak regularly with Louis Audet, and we’ll do whatever it takes to keep the head office here.’