Rogers Asks Lenders to Extend Deadline for Shaw Acquisition

Rogers on Monday announced consent solicitations to extend the terms of bonds worth a collective $7.05 billion USD and $3 billion CAD that it issued to finance its proposed $26 billion CAD acquisition of Shaw.

The Toronto-based telecom giant currently has until the end of the year to close the Shaw deal. If it fails to do so, Rogers will have to repay its lenders 101 cents on the dollar. Rogers wants to extend that deadline to December 31, 2023, as the Shaw acquisition continues to hang in the balance.

The Rogers-Shaw deal is primarily being held up by the Competition Bureau, which has petitioned the federal competition tribunal to block it due to concerns it will decrease competition and increase wireless and internet prices. Both parties met outside of court to explore agreeable resolutions, but the talks ultimately failed.

Rogers and Shaw have even agreed to sell Freedom Mobile, the latter’s wireless business that was a significant reason for the Bureau’s resistance, to Quebecor for $2.85 billion CAD. However, the Bureau isn’t satisfied and the matter appears to be headed to Canada’s merger court.

The Shaw acquisition is also yet to receive approval from the Ministry of Innovation, Science and Economic Development (ISED).

Rogers is seeking extensions in the terms of five series of USD notes and three series of CAD notes. The changes require the consent of a majority of holders.

The company is offering an initial consent fee of $23.50-62.60 USD per $1,000 in face value to holders of the U.S. notes, as well as $36.50-39.60 to holders of Canadian notes.

Holders will also be entitled to receive additional consent fees of $11.45-31 USD or $17.95-19.50 CAD if the merger doesn’t close by December 31 and they don’t force Rogers to repay the notes at that time.

Bondholders agreeing to extend the merger deadline will ensure that Rogers has the financing for the deal in place if it drags into next year. Rogers and Shaw have already extended the deadline of their merger agreement to December 31, 2022, with the option to further extend it to January 31, 2023, if financing remains available.