Cogeco lead director blasts Rogers-Altice bid
The lead director of Cogeco Inc. and Cogeco Communications Inc. is accusing the heads of Rogers Communications Inc. and Altice USA Inc. of attempting to “mislead” investors with their surprise $10.3-billion takeover approach earlier this month.
“From the outset, you have engaged in bad faith tactics, some of which created confusion in the market,” wrote James Cherry in a publicly-released letter addressed to Rogers CEO Joe Natale and Altice USA CEO Dexter Goei Wednesday.
Rogers and Altice USA unveiled their joint effort to purchase Cogeco on Sept 2. Under the arrangement proposed by Altice USA, the company would take control of Cogeco’s Atlantic Broadband operations in the United States and sell Cogeco’s Canadian assets to Rogers.
In an effort to win support for the proposal from Cogeco executive chairman Louis Audet, Altice said it’s offering “a sizeable premium” on the multiple-voting shares held by the Audet family. Altice is otherwise offering $106.53 per subordinate voting share of Cogeco and $134.22 per share of Cogeco Communications.
On the same day the offer was announced, Cogeco said its boards of directors had rejected it after consulting with the members of the Audet family, which controls Cogeco through its dual-class share structure.
Cherry's letter was sent subsequent to Goei and Natale's latest missive to Louis Audet, who serves as Cogeco's chairman.
In a letter dated Sept. 15, and released by Cogeco Wednesday, the two suitors said the Montreal-based cable company's boards hadn't lived up to their obligations in so swiftly rebuffing the offer.
"Our offer was rejected without the directors and separately the independent directors undertaking any appropriate process," they wrote. "Indeed, not one of the customary procedures that directors are expected to follow when presented with potential changes of control were undertaken."
In the letter, Goei and Natale set a 5pm ET deadline Wednesday for Audet to indicate whether Cherry would meet with them this week.
Cherry indicated in his response that that would not be happening, saying Cogeco’s boards are “fully confident” with how they handled the matter and would “not engage in a futile exercise aimed at diverting the attention of management”. He also accused Rogers and Altice of not being fully transparent with investors when their offer was revealed in a press release.
“You said that the support of the Audet family was necessary to complete a transaction, yet you failed to disclose that they had rejected your proposal the prior evening,” he wrote. “We can only surmise that this was done with a view to misleading investors and increasing the stock price in an attempt to put pressure on the family to sell.”
Spokespeople for Rogers and Altice USA were not immediately available for comment.