Aug 22, 2022
Rogers asks bondholders to change terms as Shaw deal delayed
Quebecor buying Freedom Mobile is 'step in right direction': Analyst
Rogers Communications Inc. is seeking approval from investors holding US$9.35 billion of bonds to extend the deadline to complete its acquisition of Shaw Communications Inc.
Rogers has to repay the securities at 101 cents on the dollar if the $20 billion (US$15.3 billion) deal isn’t done by the end of the year. The Toronto-based cable and wireless firm wants to extend that to Dec. 31, 2023, to ensure it still has the money in place to close if the transaction drags into next year, according to a statement Monday.
The deal has been delayed by Canada’s antitrust regulator, which has sued to block it, arguing that it will damage competition in a telecommunications sector that’s already dominated by a handful of large companies. Rogers and Shaw have agreed to sell most of Shaw’s wireless business to Quebecor Inc. to address those concerns, but the case appears headed to a hearing at the Competition Tribunal, Canada’s merger court.
The companies have already agreed to change the deadline for the deal to Dec. 31 -- with the option to extend it to Jan. 31, 2023, as long as financing remains in place.
The proposed change to the bonds applies to five series of U.S. dollar notes and three series of Canadian dollar notes, and requires the consent of a majority of holders.
Holders of the U.S. notes will be paid a consent fee ranging from US$23.50 to US$62.60 per US$1,000 in face value as an initial consent fee. They can receive additional fees of US$11.45 to US$31 if the merger doesn’t close by Dec. 31 and Rogers isn’t forced to repay the notes at that time.
Owners of the Canadian notes are eligible for similar fees.
The consent solicitation expires at 5 p.m. on Aug 31. Bank of America, Royal Bank of Canada and Bank of Nova Scotia are organizing the transaction.