Telus, Bell Ask CRTC to Delay Rogers-Shaw Hearing in Light of Boardroom Drama
In light of the still developing governance dispute over at Rogers Communications Inc. (RCI), rival telecom operators Telus Corp. and Bell Canada Enterprises (BCE) Inc., and advocacy group Public Interest Advocacy Centre (PIAC) have asked the Canadian Radio-television and Telecommunications Commission (CRTC) to delay its review of the Rogers-Shaw merger — reports The National Post.
Earlier in the year, RCI signed a deal to acquire Shaw Communications for $16 billion, pending approval from the Competition Bureau, the CRTC, and Innovation, Science and Economic Development (ISED) Canada.
Since late September, however, Rogers Communications has been embroiled in a power struggle that started with former board chairman Edward Rogers attempting to replace CEO Joe Natale with ex-CFO Tony Staffieri, and consequently being fired.
Following his dismissal, Mr. Rogers has used his influence as chair of the Rogers Family Trust that controls the telecom to mint a Board of Directors of his own and challenge the incumbent board, which his mother and two sisters also sit on, for control of the company.
Mr. Rogers escalated the boardroom power struggle to the B.C. Supreme Court last week, petitioning a judge to ratify the legal validity of his board.
Citing the ongoing uncertainty over who controls the board of Canada’s largest wireless provider, BCE Inc., Telus Corp., and PIAC have individually asked the CRTC to postpone its November 22 hearing on the Rogers-Shaw deal.
“The situation before the Commission is unprecedented and places the Commission and parties to the proceeding in an impossible position,” Bell said in its letter to the CRTC on Monday.
“To our knowledge, the Commission has never before been asked to approve a change of control transaction in circumstances where the legal control of the acquirer is itself uncertain.”
With both sides of the Rogers power struggle making their case, B.C. Supreme Court Justice Shelley Fitzpatrick could deliver a ruling as soon as Friday. However, given the complexity of the situation and each side’s refusal to back down, it may not be a final verdict on who will ultimately end up in charge.
Telus warned it could take months for the issue to be resolved, and the case could ultimately wind up in the Supreme Court of Canada.
The RCI rival said it’s “clear that neither the CRTC nor the interested parties can be certain that the application filed by Rogers on April 13, 2021 continues to be accurate, or that the Rogers representatives that would appear at the hearing on November 22, 2021 will be speaking for the company that exists months from now, and that will be executing the transaction if it is approved.”
The first to petition the CRTC to delay its hearing on the acquisition was actually PIAC. John Lawford, executive director of the advocacy group believes there will be at least some delay before the transaction closes.
RCI, on the other hand, remains entirely confident in its ability to close the deal and says that Bell, Telus and PIAC’s requests are without merit. In its letter to the CRTC on Tuesday, Rogers noted that both it and Shaw Communications are still on board with the merger, and urged the regulator to move forward with the hearing.
“Rogers and Shaw remain steadfastly committed to the timely receipt of the necessary regulatory approvals and closing of this transaction,” said Rogers. RCI added that both the company and the Rogers family “are aligned on the importance of this transaction.”
Smaller telecom operators, consumer advocacy groups like OpenMedia, and analysts have warned the Rogers-Shaw deal could increase in Canada’s wireless prices and hurt competition in the cellular industry.
Especially of concern is the merger’s inclusion/exclusion of Shaw’s Freedom Mobile, which has been credited with driving down prices in the overall market as a fourth competitor to Rogers, Bell, and Telus — Canada’s ‘Big Three’ wireless providers.
A CRTC spokesperson declined to comment Tuesday on how the regulator will respond to the requests to delay the hearing.