12.01
Rogers has agreed with third parties to purchase 3.2 MM subordinate voting
shares of Cogeco Cable (CCA) and 1.62 MM subordinate voting shares of
CCA’s parent, Cogeco Inc. (CGO), for $36.43 and $28.61 per share,
respectively. The aggregate consideration was $163 MM.
With this transaction, Rogers now owns 29.8% of CCA’s subordinate voting
shares and about 20.2% of CCA equity. It also owns 33.6% of CGO’s
subordinate voting shares and about 29.9% of CGO’s equity.
While this purchase leads to renewed takeover speculation, we view it as
more of an opportunistic move by Rogers given a motivated seller. With
CCA’s holdco structure (Audet family holds 72% of CGO’s voting shares,
which in turn controls CCA), any deal still requires Audet family consent.
While the transaction is material, it doesn’t change the story for CCA in the
near term, as the Audet family are still not likely sellers quite yet. We
continue to believe that CCA will ultimately participate in M&A at some point
down the road, and obviously Rogers would be the likely pursuer.
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