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Rogers vows to keep Cogeco in Quebec as part of takeover proposal

The COGECO website is seen in Montreal on Wednesday, September 2, 2020. Cogeco Inc. and Cogeco Communications Inc. are facing a $10.3-billion offer that would see its U.S. business scooped up by a New York cable company and its Canadian assets head to long-time shareholder Rogers Communications Inc. THE CANADIAN PRESS/Paul Chiasson
September 04, 2020 - 2:32 PM

MONTREAL - Rogers Communications Inc. sought Friday to reassure Quebecers over its attempt to buy the Canadian assets of Montreal-based Cogeco Inc. and Cogeco Communications Inc., pledging to keep the companies' headquarters in the province where they've been rooted for more than six decades.

"Upon successful completion of a Cogeco transaction, Rogers would ensure that Cogeco’s headquarters and management team remain in the province, including the operations of the company’s Quebec-based media assets," Rogers said.

Gestion Audem Inc., a company controlled by members of the Audet family and which holds the majority of voting shares in Cogeco, earlier this week rejected an unsolicited $10.3-billion takeover proposal from U.S. cable company Altice USA Inc. that would have seen Rogers purchase the companies' Canadian assets. The Cogeco boards said their independent members also rebuffed the bid.

The proposal prompted backlash from the Quebec government.

"There is no question of letting this Quebec company move its head office to Ontario," Premier Francois Legault said Wednesday during a radio interview with FM93, a Cogeco-owned station.

The premier, who said officials had spoken with Cogeco CEO Louis Audet that morning, did not give details about what steps he would take.

In Friday's statement, Rogers CEO Joe Natale emphasized Rogers' 35-year history in Quebec and pointed to its 2004 purchase of wireless service provider Fido — whose headquarters remain in downtown Montreal — as a blueprint for its current bid.

"Rogers and Fido have deep roots across Quebec and we want to build on them," Natale said in a statement.

"We are committed to investing in high-quality jobs, delivering both wireless and broadband next-generation technology and helping close the connectivity gap in rural and remote Quebec communities. Now more than ever, we want to grow our local presence here and help to contribute to a strong, vibrant Quebec."

Locals may cast a wary eye on Rogers' attempts to win them over.

"I'm not sure Quebecers are going to be entirely satisfied. They've heard the story before," said Karl Moore, an associate professor at McGill University's business school.

"The concern is a loss of jobs and a loss of strategic decision making," even if the headquarters reside officially in Montreal, he said.

"In the '70s and '80s we saw a lot of jobs move down the (Highway) 401 to Toronto. So it's a flash point in Quebec."

The unsolicited bid from Altice included a side arrangement that would see Cogeco sell its Canadian assets to Rogers for $4.9 billion if the Altice deal goes through.

Altice would keep Cogeco's U.S. assets, including Atlantic Broadband, a cable operator providing residential and business customers with broadband, video and telephone services in 11 U.S. states.

This report by The Canadian Press was first published Sept. 4, 2020.

Companies in this story: (TSX:CCA, TSX:CGO, TSX:RCI.B)

News from © The Canadian Press, 2020
The Canadian Press

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