Cogeco Faces Hostile Takeover Bid
CBJ — Canadian telecom company Cogeco Inc. is facing a hostile takeover bid from a New York firm called Altice USA that is offering in excess of $10.3 billion USD.
However, the family that controls both Cogeco Inc. and Coegeco Communications doesn’t support the bid.
Gestion Audem, a company controlled by the members of the Audet family, has no intention of selling its controlling shares, at least not as of this point. It’s still uncertain the level of resolve the family has in terms of whether it’s a hard no on selling, or if they might be willing to have a change of heart if the offer was to be sweetened.
Altice USA, a large U.S. cable operator, included a side arrangement that would see Rogers Communications acquire Cogeco’s Canadian assets for $4.9 billion, which isn’t sitting well with the Quebec government. Among other things it would mean corporate headquarters moving from Montreal to Toronto.
Gestion Audem holds nearly 70% of Cogeco’s voting rights and about 83% of voting rights at Cogeco Communications. Louis Audet is executive chairman of the companies.
“Under the stewardship of Mr. Audet, the Audet family, and the 4,500 Cogeco team members, Cogeco has built an iconic company in Canada and the United States,” Rogers president and chief executive Joe Natale said in a statement. “This meaningful offer reflects the tremendous accomplishments of the Audet family and Cogeco’s employees.”
The proposal caused Cogeco’s shares to increase by almost 20%.
Rogers has wanted to enter the lucrative Quebec market for some time now, but hasn’t been able to penetrate the provincial border in any meaningful way. Rogers hoped to acquire Videotron in 2000, but it wound up being purchased by Pierre Karl Peleadeau’s Quebecor.
If the Cogeco deal eventually does happen, Altice would own the company’s U.S. assets, with Rogers taking over the assets in Canada. However, there won’t be much in the way of cooperation from the Quebec provincial government. Premier François Legault made it clear he is adamantly against the takeover with a stern response. “It is out of the question to let this Quebec company move its head office to Ontario.”