There are less than two weeks until the biggest cable merger in Canadian history -- the tie-up between Rogers and Shaw -- is supposed to be nailed down.
There are less than two weeks until the biggest cable merger in Canadian history -- the tie-up between Rogers Communications Inc. and Shaw Communications Inc. -- is supposed to be nailed down.
Investors, meanwhile, are bidding up Rogers debt in anticipation the debt-heavy deal might collapse. A 30-year bond issued by the company in March to help finance the acquisition ended last week at a yield of 1.98 percentage points above benchmark government bonds, down from 2.4 percentage points in late May. The price implies a 44 per cent chance that the deal won’t be completed this year, according to Bloomberg Intelligence estimates.
The Shaw takeover was designed to improve Rogers’ wireless coverage across western Canada, extend its cable business and give it financial heft to compete against larger rival BCE Inc. But its network woes may have handed a stronger argument to those who say the deal should be denied because it will concentrate too much of the nation’s telecommunications infrastructure in one company.
This is just a first step. Canadians deserve more from their providers in terms of quality and reliability of service and I will ensure they meet the high standard that Canadians expect, including improving competition, innovation and affordability. If the latter happens, it might take until the end of 2022 or early 2023 to resolve the deal’s status. “That prospect is increasing in terms of probability,” said Aravinda Galappatthige, a telecom analyst at Canaccord Genuity.Still, even with the deal likely to be extended past the July 31 deadline and drag into the fall, it’s possible it will still get approval. Competition lawyer Mark Warner says Boswell has an incentive to settle the antitrust complaint because his legal case is weak.
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