Altice USA (NYSE: ATUS) made a second unsolicited bid October 18 for Canadian cable MSO Cogeco – and again appears unwelcomed. While the Cogeco board would only say that it is considering the offer, Gestion Audem, the holding company of Audet family, which and holds 69% of all voting rights of Cogeco, dismissed the offer and reiterated it's not interested in selling.
The Altice USA bid does have the backing of Canadian cable operator Rogers Communications (TSX: RCI.A and RCI.B, NYSE: RCI), which also holds a significant stake in Cogeco and, by extension, its Cogeco Communications Inc. subsidiary. Altice USA and Rogers have agreed to split up Cogeco should Altice somehow convince the Audet’s to sell. Altice USA would take ownership of Cogeco’s U.S. assets, essentially Atlantic Broadband, while Rogers would buy the Canadian assets from Altice USA, in part using the money it would receive from Altice USA’s purchase of Cogeco.
However, the Audets appear to have no interest in the deal. "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, president of Gestion Audem.
Audet also took the opportunity to needle fellow shareholder Rogers. "Rogers has freely chosen to accumulate shares in the Corporations with full knowledge of the implications. The Audet family regrets that Rogers' capital allocation decision is causing the Rogers family and Board such anguish," said Audet.
The new bid follows the September 2 offer (see “Cogeco rejects takeover bid from Altice USA, Rogers”). Altice USA now says it is willing to pay C$11.1 billion (US$8.4 billion) in cash for Cogeco and Cogeco Communications. This includes C$5.1 billion (US$3.9 billion) for the U.S. assets.. The first foray saw Altice USA offer CAN$10.3 billion (US$7.8 billion) in cash for all shares of Cogeco and Cogeco Communications, including those Rogers already owns. The earlier bid earmarked CAN$4.8 billion (US$3.6 billion) for the U.S. assets.
Cogeco’s board did not indicate when it would make a decision on the bid. But, given the Audets’ disapproval of it, that exercise would appear to be a formality.
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