The offer was reviewed Wednesday morning and was rebuffed by Cogeco’s board of directors.
In addition to Canada, Cogeco also provides internet service in the U.S. under the subsidiary Atlantic Broadband. Altice was looking to purchase Atlantic Broadband, along with the rest of Cogeco’s U.S. assets, for $10.3 billion.
Had the bid been accepted by Cogeco, Altice would then sell the Canadian assets to Rogers for $4.9 billion, and Rogers would have an expanded presence in Quebec.
A Cogeco press release stated that Gestion Audem Inc, which holds 69 per cent of all voting rights of Cogeco Inc and therefore 82.0 per cent of Cogeco Cable Inc., will not support the proposal.
Rogers had already heavily invested in Cogeco in the past. The Toronto Star reported that after losing a bid for Videotron against Quebecor in 2000, Rogers bought 892,250 subordinate voting shares in Cogeco Cable and $946,069 subordinate voting shares in Cogeco in 2010. After the purchase, Rogers owns 39.9 per cent of Cogeco’s subordinate shares and 35.5 per cent of the company’s equity.
Subordinate voting share is a type of restricted share. While it grants its shareholder the right to vote, it does not grant it the control of the company. In the Toronto Star article, Rogers said the purchase was for investment purposes only and no intention of acquiring ownership over Cogeco.
Evidently, that agenda has changed.