Cogeco Inc (TSX:CGO) - Executive Chairman, Louis Audet
Executive Chairman, Louis Audet
Source: The Globe and Mail
  • The controlling shareholders of Cogeco (CGO) have rejected yesterday’s unsolicited takeover bid from Altice USA and Rogers Communications
  • Gestion Audem, the Audet family’s holding company which owns a majority stake in both Cogeco Inc. and Cogeco Communications, said it would not support the offer
  • The proposal also prompted a response from Quebec’s Premier François Legault, who said it is out of the question to let Cogeco’s head office move to Ontario
  • This is not the first time Rogers has failed to enter the Quebec market, after its proposed takeover of Videotron was beaten by Montreal-based Quebecor
  • Cogeco (CGO) is currently up 1.12 per cent and is trading at $93.22 per share

The controlling shareholders of Cogeco (CGO) have rejected yesterday’s unsolicited takeover bid from Altice USA and Rogers Communications.

Gestion Audem, the Audet family’s holding company which holds a 69 per cent interest in Cogeco Inc. and an 82.9 per cent stake in its subsidiary Cogeco Communications, said in a statement that it would not support the offer.

“Members of the Audet family unanimously reiterated that they are not interested in selling their shares,” said Louis Audet, President of Gestion Audem and Executive Chairman of Cogeco.

“The family takes pride in its stewardship role in both companies, offering high-quality services to its customers, enriching the communities in which they operate and creating superior returns for shareholders through sound growth strategies.”

According to the terms of the deal proposed by TSX-listed Rogers and NYSE-listed Altice, Altice would acquire 100 per cent of Cogeco Inc. and Cogeco Communications for a total all-cash consideration of C$10.3 billion.

This amount is based on a valuation of $106.53 per Cogeco Inc. share and $134.22 per Cogeco Communications share, representing a 30 per cent premium over the companies’ one-month volume weighted average share price.

Following the acquisition by Altice, Rogers would then acquire Cogeco’s Canadian assets for a gross price of $5.5 billion.

Joe Natale, President and CEO of Rogers Communications, said the offer reflects the tremendous accomplishments of the Audet family and Cogeco’s employees.

“Rogers is excited about the opportunity to expand its breadth of industry leading technologies and products to an additional 1.8 million homes and businesses,” he added.

This isn’t the first time Rogers had made a failed attempt to gain traction in the Quebec market. In 2000, the telecommunication giant’s bid to acquire Videotron was surpassed by Montreal-based Quebecor.

The unexpected takeover from Rogers and Altice also prompted a response from Quebec’s Premier François Legault, who said in an interview with Quebec City radio station FM93 (CJMF) that it is out of the question to let Cogeco’s head office move to Ontario.

“We talked this morning with Louis Audet,” he said. “We speak regularly with Louis Audet, and we’ll do whatever it takes to keep the head office here.”

Despite its failure to land, the proposal prompted a jump in Cogeco Inc.’s share price of more than 30 per cent, while Cogeco Communications saw a similar increase of just under 30 per cent.

Cogeco (CGO) is currently up 1.12 per cent and is trading at $93.22 per share at 10:53am EDT.

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