Canadian telecom company Cogeco’s controlling shareholder categorically rejected the unsolicited takeover offer launched by Altice USA last week, stressing that there is no room for negotiation.
Altice USA offered about $7.8 billion for Cogeco on Sept. 2, a tandem deal where it would buy the telecom company’s U.S. assets -- Atlantic Broadband -- for $3.6 billion, while Canadian communications giant Rogers Communications would purchase Cogeco’s Canadian assets for $4.2 billion. The deal, valued at about C$106.53 per share, represented a 36% premium to Cogeco’s trading price on Aug. 31.
Since the offer, Cogeco’s stock price has soared -- it closed at C$132.16 per share on Sept. 2. The stock fell to C$106.75 per share on Sept. 8 as it has become clear that the Audet family does not want to sell.
Altice USA shares, up about 3.5% on Sept. 2 to $28.65 per share, fell to $26.25 on Sept. 8.
In a statement issued Sept. 7, Louis Audet, the appointed representative of the Audet family, executive chairman of Cogeco and president of Gestion Audem, which holds the family’s stake in Cogeco, left no room for interpretation.
“I want to provide absolute clarity to stakeholders regarding our intentions in response to the recent unsolicited proposal to acquire Cogeco. Our stocks are not for sale,” Audet said in the statement. “And let me be clear, our refusal is not a negotiating position, it is final.
“Our father started this business 63 years ago in Trois-Rivières, Quebec, sowing the seeds of a business that today has a story of incredible growth,” he continued. “The company went public in 1985 and annual revenues by that time had increased to $20 million. Today they are $ 2.5 billion. The company is well managed, growing, strategically positioned for the evolving and dynamic future of the telecommunications and media industries.
“My family, together with our boards of directors and our management team, are very proud and satisfied with our long term vision for the continued growth of Cogeco and the ownership structure that makes this long term vision possible.”
Cogeco had said the Audet family did not want to sell shortly after it received Altice USA’s offer. Altice had subsequently said it was open to starting a dialog and Rogers pledged to keep Cogeco’s headquarters in Montreal. That apparently wasn’t enough to sway the family.
Whether Altice USA will take its case to shareholders remains to be seen. The Audet family holds 69% of Cogeco Inc.’s voting rights, which in turn controls 82.9% of the vote of subsidiary Cogeco Communications, so any deal would have to include them. Altice USA CEO Dexter Goei is scheduled to speak at the virtual Bank of America 2020 Media, Communications & Entertainment Conference today (Sept. 9) at 3:20 p.m.
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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.