The Canadian Radio-television and Telecommunications Commission (CRTC) will be moving forward with its November 22 hearing into Rogers’ proposed $26 billion acquisition of Shaw Communications Inc. — reports The Globe and Mail.
The telecom regulator has denied individual requests it received from Bell Canada Enterprises Inc., Telus Corp., and advocacy group Public Interest Advocacy Centre (PIAC) to delay the hearing in light of the boardroom drama, and resulting governance dispute, that engulfed RCI in recent weeks.
Earlier in the year, Rogers signed a deal to acquire Shaw Communications for $26 billion, pending approval from the Competition Bureau, the CRTC, and Innovation, Science and Economic Development (ISED) Canada.
Since late September, however, Rogers Communications Inc. (RCI) has been embroiled in a power struggle that started with chairman Edward Rogers attempting to replace CEO Joe Natale with ex-CFO Tony Staffieri and consequently being fired.
Following his dismissal, Mr. Rogers used his influence as chair of the Rogers Family Trust that controls the telecom giant to reconstitute its Board of Directors with a written resolution, without holding a shareholder meeting. The new board reinstated Mr. Rogers as chairman.
Mr. Rogers’ Board of Directors challenged the incumbent board, which his mother and two sisters also sat on, for control of the company. The boardroom power struggle escalated to the B.C. Supreme Court, where a judge found Mr. Rogers’ reconstitution of RCI’s board legally valid last week.
With Edward Rogers cementing control over RCI’s board, the CRTC sees no plausible reason to postpone the hearing, it appears.
In a November 12 letter, the CRTC’s secretary-general, Claude Doucet, said the November 5 ruling by Justice Shelley Fitzpatrick has resolved uncertainty around RCI’s governance and that the upcoming hearing will take place as planned.
However, RCI rival Telus argued in a letter dated November 8 that there still remains “considerable uncertainty” regarding the company’s leadership.
Telus noted that Mr. Rogers not only tried to replace RCI CEO Joe Natale, but has also made conflicting statements about his confidence in the latter’s abilities. Mr. Rogers said in an affidavit filed with the B.C. Supreme Court last month that he had long-standing concerns about Mr. Natale’s performance. After winning his case, however, Mr. Rogers said that Natale has the board’s full support.
While the CRTC does not plan on delaying the hearing, the Commission made it clear to RCI that the telecom would be facing serious scrutiny.
In a letter dated November 10, the CRTC said that Rogers has excluded the value of Shaw’s ground-based video on demand and pay-per-view services because it is not planning to operate those services, nor is it seeking permission to acquire them.
“Certain interveners have questioned the exclusion of the revenues associated with these services from the value of the transaction,” wrote Mr. Doucet.
“The Commission hereby notifies Rogers that it intends to question its proposed calculation of the value of the transaction at the hearing and may ask … Rogers to submit a revised calculation for the value of the transaction and its associated tangible benefits package following this questioning.”
