Rogers Communications turmoil intensifies as Edward Rogers pushes out five directors
Edward Rogers is playing another card in his attempt to assert control of the Canadian telecommunications giant that bears his family's name.
Late Thursday night, just a few hours after Rogers Communications Inc. (RCI) announced in a terse statement that he had been ousted as chairman of the company's board of directors, Edward Rogers said he was going to replace five of the company's directors by availing himself of his power as chair of the family trust that holds almost all of Rogers' voting class shares.
"The Control Trust chair is disappointed with recent events and commentary regarding the governance of RCI and has lost confidence in the board of RCI as currently constituted," Mr. Rogers said via a news release.
As a result, he said he "intends to remove" current directors John Clappison, David Peterson, Bonnie Brooks, Ellis Jacob and John MacDonald – the latter of whom had just hours earlier been installed as the new chairman of Rogers' board.
In their place, Mr. Rogers confirmed earlier reporting by Bloomberg News by announcing those five would be replaced by Michael Cooper, Jack Cockwell, Jan Innes, Ivan Fecan and John Kerr.
The resolution is subject to approval by Rogers' Class A shareholders representing 66.6 per cent of the outstanding voting shares. The Control Trust that Mr. Rogers chairs holds 97.53 per cent of those shares.
"The Control Trust chair intends to cause the resolution to be signed and delivered to RCI on or about October 22, 2021, following which the resolution and reconstituted board will be effective," according to the release late Thursday night.
However, by Friday evening, MacDonald – in his function as Rogers’ chair – confirmed in a release that Mr. Rogers’ resolution had been delivered to the company and that it was deemed “invalid” by the company and legal counsel. As such, MacDonald said the board’s composition remains unchanged.
While the company said earlier Friday that it isn’t aware of a board-level overhaul being executed in the way Mr. Rogers is proposing, a corporate governance expert noted this is no ordinary situation.
“I predict that Edward Rogers will be successful in removing the five incumbent directors,” said Richard Leblanc, a professor of governance, law and ethics at York University, in an interview Friday.
“I think that Mr. Edward Rogers is an activist and I think he’s looking at it with a skeptical lens. And I think if you’re a 97 per cent shareholder, you’re a force to be reckoned with. You’re not an average chair and you’re not an average director.”
The turmoil intensifies a power struggle that has been playing out in the public eye, after almost two weeks of leaks stemming from Mr. Rogers’ attempt to oust the company's chief executive, Joe Natale.
That effort failed, and early Thursday morning in a conference call with analysts, Natale said he had the "strong, unequivocal support" of Rogers' board of directors. And all of this is playing out as Rogers attempts to close its planned $26-billion takeover of Shaw Communications Inc.
In an emailed statement that was delivered alongside Mr. Rogers' statement, two long-time Rogers insiders who worked closely with the company's founder (and father to Mr. Rogers), Ted Rogers, voiced their support for the founder's son.
“I worked alongside Ted for most of my 53 years at RCI and am supportive of the changes that have been announced today," said Phil Lind, who is the vice-chair of Rogers' board and whose history with the company dates back to 1969. Lind also sits on the advisory committee of the control trust.
"I look forward to working with Edward, the Rogers family, and the reconstituted board to help the company complete its game-changing transaction with Shaw," said Alan Horn, who previously chaired Rogers' board and briefly served two stints as the company's interim president and chief executive.