Increased offer for Cogeco rejected by Audet family

Rogers Communications Inc. and Altice USA Inc. upped their offer in a joint takeover bid of Cogeco Inc. from $10.3 billion to $11 billion over weekend, a bid that was rejected by the controlling shareholder of the company, the Audet family. The offer, in which Rogers would take over Cogeco's Canadian operations while Altice takes over assets south of the border, would see Rogers increase its own offer by $300 million, from $4.9 billion up to $5.2 billion. "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," the family said in a Sunday evening release. "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." The initial offer from Rogers and Altice was cooly received by the Audets. Negotiations between the companies further soured when Cogeco's board of directors accused the CEOs of both Rogers and Altice of making “untrue statements and unsubstantiated allegations” against them, and “misleading investors and increasing the stock price in an attempt to put pressure on the family to sell.” In a Monday morning note, Canaccord Genuity analyst Aravinda Galappatthige wrote that the bid would likely "need broader support or this effort loses momentum." "Despite the financially attractive offer, we believe that the stock may not respond well given the unwavering position of Gestion Audem," Galappatthige wrote, adding that while an even higher bid was not out of the question, it was unlikely in the absence of movement on the Cogeco side of the deal. While acknowledging that the new offer is more attractive, National Bank analyst Adam Shine wrote Sunday night that it "would appear that Cogeco just isn't for sale." The release gives Cogeco a month to decide. "If Altice USA is unable to arrive at a mutually satisfactory agreement by November 18, 2020, or, at the very least, it does not see a clear path forward to completion of a transaction, this revised offer will be withdrawn," the Altice release said. In the Sunday release, Altice CEO Dexter Goei called the new offer "incredibly attractive," and said that it "significantly rewards all shareholders." "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,” Goei said in the release.

Increased offer for Cogeco rejected by Audet family

Brief | October 19, 2020

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Increased offer for Cogeco rejected by Audet family

Brief | October 19, 2020

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