Lawyers working on Rogers’ proposed $26 billion takeover of Shaw Communications are set to claim the majority of more than $100 million in fees that the deal will generate, according to a report from Reuters.
As the Rogers-Shaw merger reaches the end of its almost two years long road to regulatory approval, lawyers are expected to beat out the bankers supporting the deal and shareholder advisers to take the lion’s share of fees from the transaction.
Meanwhile, hedge funds that bet on the merger will enjoy a payday of more than $200 million once it successfully closes.
The long-embattled takeover cleared what was arguably its largest hurdle last month when the Federal Court of Appeal rejected the Competition Bureau’s appeal of a federal tribunal decision to greenlight the transaction.
While parties like Globalive Capital and independent internet service provider TekSavvy are petitioning the Canadian Radio-television and Telecommunications Commission (CRTC) to investigate the deal once again, Rogers and Shaw officially only need Industry, Science and Technology Minister François-Philippe Champagne to sign off on the $2.85 billion sale of Shaw-owned Freedom Mobile to Quebecor’s Vidéotron that’s part of the broader merger in order to proceed.
In April 2021, Rogers and Shaw estimated that their union would cost a total of $100 million in fees. However, some bankers and lawyers now expect the fee pot to be larger because of how long the approval proceedings have dragged on.
“Due to the lengthy approval process, the legal teams are likely to take the majority of these fees, which is not typical,” said Derek van der Plaat, Managing Director of M&A and Capital Markets at BDO Canada.
Rogers is represented by law firm Lax O’Sullivan Lisus Gottlieb, while Shaw has retained the services of Davies Ward Phillips & Vineberg. The Freedom-Vidéotron adds another outlet for fees, with law firm Bennett Jones representing Quebecor at the Competition Tribunal.
Rogers’ takeover of Shaw will create the second-largest telecommunications operator in Canada. It is expected to be the 10th-largest deal in Canada since 1995, according to data from Dealogic.
Rogers, Shaw, and Quebecor last week extended their mutual deadline for both the merger and the Freedom-Vidéotron sale for the second time this year, now moving it to March 31, 2023.
