Altice USA, more than one month after its unsolicited bid for Cogeco Communications was soundly rejected by the Canadian telco’s controlling shareholder, has increased its bid by 8%, including upping its offer for Cogeco’s US operations, Atlantic Broadband.
In a statement, the Audet family, which controls about 69% of Cogeco's vote, again rejected the deal.
Altice USA said on Sunday that along with Canadian telecom giant Rogers Communications, it was raising its offer for 100% of Cogeco to C$11.1 billion ($8.4 billion) in cash. Altice USA said if the offer was accepted, it would pay about C$5.1 billion ($3.9 billion) for the Atlantic Broadband assets and sell Cogeco’s Canadian businesses to Rogers for the remainder.
Altice and Rogers offered a combined $7.8 billion for Cogeco on Sept. 2. Of that amount, Altice said it would pay about $3.6 billion for Atlantic Broadband.
Cogeco’s ruling Audet family rejected Altice and Rogers’ earlier bid in September, adding that the family had no intention to sell its stake.
At the time Louis Audet, Cogeco executive chairman and leader of the Audet Family Trust, Gestion Audem, said in a statement that the family’s rejection of the bid “not a negotiating tactic.”
In a statement issued late Sunday, the family held fast to that stance.
"As we did on September 2nd, 2020, following the announcement of their first unsolicited proposal, members of the Audet family unanimously reject this further proposal. Since this is apparently not registering with Rogers and Altice, we repeat today that this is not a negotiating strategy, but a definitive refusal. We are not interested in selling our shares," said Louis Audet in the statement.
He added that the Audet family's stewardship of the company over 63 years has allowed Cogeco to grow into the only broadband provider with significant operations in the U.S. and Canada, and its stock price and operating results have outperformed both Altice USA and Rogers.
"Rogers has freely chosen to accumulate shares in the Corporations with full knowledge of the implications," Louis Audet continued. "The Audet family regrets that Rogers' capital allocation decision is causing the Rogers family and Board such anguish."
A good chunk of the bid increase is targeted at the Audet family, led by Cogeco chairman Louis Audet. Altice said that about C$900 million ($682 million) of the purchase price would go to the family for their shares, up from the C$800 million ($612 million) they would have received in the earlier offer.
“We are pleased to present an incredibly attractive revised and enhanced offer for Cogeco that significantly rewards all shareholders and incorporates feedback from recent discussions with holders of subordinate voting shares,” Altice USA CEO Dexter Goei said in a press release. “We encourage the Cogeco boards to act in the best interest of all shareholders and stakeholders as they thoughtfully consider this offer, and we respectfully request that the boards engage with us to discuss our proposal.”
Altice said in a press release that it was giving Cogeco until Nov. 18 to accept the offer, after such time it would withdraw the bid.
The smarter way to stay on top of the multichannel video marketplace. Sign up below.
Mike Farrell is senior content producer, finance for Multichannel News/B+C, covering finance, operations and M&A at cable operators and networks across the industry. He joined Multichannel News in September 1998 and has written about major deals and top players in the business ever since. He also writes the On The Money blog, offering deeper dives into a wide variety of topics including, retransmission consent, regional sports networks,and streaming video. In 2015 he won the Jesse H. Neal Award for Best Profile, an in-depth look at the Syfy Network’s Sharknado franchise and its impact on the industry.