Breaking News
Investing Pro 0
🚨 Our Pro Data Reveals the True Winner of Earnings Season Access Data

Rogers, Shaw shares jump as deal prospects brighten after govt intervention

Stock Markets Oct 26, 2022 05:37PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Ethernet cables are seen in front of Rogers and Shaw Communications logos in this illustration taken, July 8, 2022. REUTERS/Dado Ruvic/Illustrations
 
ROG
+2.25%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Divya Rajagopal and Tiyashi Datta

(Reuters) -Shaw Communications Inc's shares rose as much as 10% on Wednesday after the government's intervention raised hopes that Canada is likely to approve Rogers (NYSE:ROG) Communications' C$20 billion ($14.7 billion) bid for Shaw.

Analysts said they expected the deal to close before year end as the terms put forward by Industry Minister Francois Champagne late on Tuesday brings Canada's anti-trust authority and Rogers-Shaw a step closer to a settlement.

However, Canada's anti-trust authority still has objections to the deal.

"We remain firm in our decision to challenge this proposed merger to protect the public interest," a competition bureau spokesperson said in an email. The bureau declined to comment further and said the matter will be determined by courts.

Rogers' launched its bid to buy Shaw in March 2021, but the competition bureau blocked it, saying it would lessen competition in a market that has among the highest wireless prices in the world.

"It is likely that we see a settlement coming through during the mediation process scheduled for later this week," said Aaron Glick, an analyst with New York-based Cowen. Since the competition bureau sits under the minister, it is a signal to the bureau to settle, he said.

Rogers shares closed up 5.8%, while Shaw ended up 7.2%.

Matthew Dolgin, equity analyst with Morningstar, said the mediation between the parties seems more fruitful now than it appeared couple of days ago.

To allay the antitrust bureau's concerns, Rogers offered to sell Shaw-owned Freedom Mobile to Quebecor.

On Tuesday, Champagne outlined conditions to approve that deal, saying Quebecor should hold on the new spectrum for at least 10 years and keep the price of its services at par with what they are in Quebec, which is 20% lower than rest of Canada.

Quebecor Chief Executive Pierre Karl Peladeau told Reuters on Tuesday that the company intends to accept the conditions stipulated by the minister.

Champagne's announcement comes as the companies are set to begin a two-day mediation process on Thursday at the Competition Tribunal. The competition bureau has said the sale of Freedom Mobile to Quebecor is not sufficient to overcome its concerns about market concentration.

The bureau and the companies will try and find a remedy during the mediation process though the parties are not bound to come to a settlement. If the mediation fails there will be a hearing that is scheduled to start on Nov. 7..

"We believe this pragmatic view by the minister has the chance to provide a good middle ground to build on between the parties," said Scotiabank analyst Maher Yaghi, who upgraded Shaw to "sector outperform" on increasing odds of the deal closing.

($1 = 1.3573 Canadian dollars)

Rogers, Shaw shares jump as deal prospects brighten after govt intervention
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email