On Friday, Rogers ratcheted up the pressure on Cogeco by announcing it will invest $3 billion CAD in Quebec’s telecom networks if its attempt to take over Cogeco is successful.
Earlier this month, Altice USA and Rogers made a $7.8 billion CAD cash offer to buy Cogeco and Cogeco Communications, reads a new report from Financial Post.
Rogers owns a 41 percent share in Cogeco and a 33 percent stake in Cogeco Communications while the Audet family owns 69 percent of the voting rights in Cogeco. Under the terms of the proposed bid, Rogers would gain control of Cogeo’s Canadian assets while Altice USA would own US-based Atlantic Broadband.
The Audet family refused the offer, saying it wasn’t willing to negotiate further. Cogeco lead director James Cherry said Rogers and Altice engaged in “bad faith tactics, some of which created confusion in the market,” in their offer after Rogers and Cogeco exchanged letters around mid-September.
Rogers is putting pressure on Cogeco to sell by saying it’s better equipped to expand rural connectivity and accelerate the rollout of 5G in Quebec. Rogers said it would have 5G enabled across 95 percent of Quebec over the next five years if the Audet family agrees to sell.
“Rogers is deeply committed to the future of innovation and the knowledge economy in Quebec. We would be honored to help enhance the customer experience and bring new investments including 5G that will fundamentally reshape the economic landscape of Quebec,” said Joe Natale, president and CEO of Rogers Communications, in a statement. “This is about the future, and helping ensure that Quebec’s ambitions around innovation, connectivity, health and education advancements are fully realized.”
Rogers’ $3 billion CAD investment plan over the next five years suggests there may have been some encouraging signs, but persuading a family-run firm to sell was always going to be a tough ask.
Half of the total would be spent on connectivity – $1.5 billion CAD has been earmarked for network investments, including rural connectivity, connected home services, and 5G. Rogers said it will commit to covering 95 percent of Quebec’s population with 5G in five years.
Rogers also pledged to establish a tech innovation hub in Quebec, creating up to 300 jobs in artificial intelligence, software engineering, and digital technology. And there are a number of promises around community partnerships, sponsorship of sporting events, and supporting use of the French language.
“Rogers may continue making all the investments it wishes in Quebec, but it doesn’t need Cogeco to do so,” Cogeco said in a statement Friday afternoon. “If Rogers fails to invest, their competitors will take away its mobile customers, regardless of 5G. As far as Cogeco is concerned, the company remains focused on executing its profitable growth strategy, investing in its state of the art broadband networks and offering leading edge services to its customers.”