BCE Inc. confirmed Saturday it approached Shaw Communications Inc. for a takeover before eventually walking away due to regulatory concerns.
"Bell is Company A described in the proxy. We’ve made a number of successful strategic acquisitions over the last decade and look closely at opportunities that may work. We determined this opportunity wasn’t in the best interests of our stakeholders," said Nathan Gibson, a spokesperson for Bell, in an email. 
In a regulatory filing late Friday afternoon, Shaw said the chief executive officer of an unidentified "Party A" talked about the "potential benefits" of a tie-up in a meeting with Shaw CEO Brad Shaw on Jan 6.
Brad Shaw subsequently invited Rogers Communications Inc. CEO Joe Natale to a meeting on Jan. 29 after he informed Shaw's board of the interest from "Party A". According to the filing, Natale had earlier lobbed the idea of a deal in a meeting with Brad Shaw on July 30, 2020. 
By early February, Brad Shaw opened his company up to a sale process and asked Natale and the chief executive of "Party A" (BCE's Mirko Bibic) to come back with non-binding takeover proposals.
According to the filing, Rogers initially offered $35.00 per share, while "Party A" (Bell) proposed a deal at $37.00 per share in cash and stock. Rogers later bumped its offer to $40.50 per share on Feb. 22, while "Party A" raised its non-binding proposal to $39.25 per share before further hiking to $40.50 per share -- thus matching Rogers -- on Feb. 27. According to the regulatory filing, however, the proposal from "Party A" "continued to contain certain regulatory issues that had previously been identified as being of concern." 
While the specific issues weren't identified in the filing, a source familiar with the matter told BNN Bloomberg that Shaw’s board wanted a so-called “hell or high water” clause. This is a clause in which the seller insists the buyer takes on all the regulatory risk and puts the buyer in the position of agreeing to any conditions the regulator imposes, no matter what. The source said Bell could not agree to that clause because from its perspective it would expose the company to unlimited risk.
The source noted the "hell or high water" clause could have put Bell in a position where it would potentially have to sell newly-acquired spectrum. The source added that if Canadian regulators want an effective fourth wireless carrier, there is a risk that Rogers may have to give up newly acquired spectrum from the 3500MHz auction this summer to ensure this fourth competitor is effective and can compete in 5G, which the source described as being a big monetary risk.
The source also said a "hell or high water" clause would have limited bargaining power with regulators and given all leverage to the Competition Bureau.
According to Shaw's regulatory filing, Brad Shaw contacted the chief executive of "Party A" on March 2 to let him know that the outstanding regulatory issues would have to be resolved if he wanted to move forward in the bidding process -- which he balked at. 
One day later, a special committee of Shaw's directors was informed that "Party A" had withdrawn from the process. That left the door open for Rogers, which finalized its takeover agreement, at $40.50 per share, with Shaw on March 13. The deal was publicly announced on March 15 and awaits regulatory approval, which isn't expected until the first half of next year. 

- With files from Amber Kanwar

BNN Bloomberg is a division of Bell Media, which is owned by BCE.