Noah Zivitz

Managing Editor, BNN Bloomberg

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Rogers Communications Inc. delivered a scathing rebuke of the Competition Bureau’s attempt to block its $20-billion takeover of Shaw Communications Inc. on Friday.

In a filing to the Competition Tribunal, Rogers said the watchdog has “failed to properly assess” the competitive effects of the takeover and argued that Competition Commissioner Matthew Boswell can’t establish that the deal would substantially lessen wireless competition. It called on the Tribunal to reject the Bureau’s application to derail the transaction.

“The Commissioner insists that no aspect of the transaction can proceed, regardless of what divestiture Rogers and Shaw propose and regardless of the benefits to Canadians and the Canadian economy that will be lost as a result. The Commissioner’s position is unreasonable, contrary to both the economic and fact evidence presented to the Bureau, and not supportable at law,” Rogers said.

In an application to the Tribunal earlier their month, Boswell said the divestiture of Shaw’s Freedom Mobile wireless business that was initially proposed was "not an effective remedy."

Despite the tension, the competition watchdog reached a truce of sorts with Rogers and Shaw on Monday, when the two companies agreed not to proceed with their deal until a negotiated agreement is reached with the Bureau, or a full hearing takes place before the Tribunal.

WAITING IN THE WINGS

Rogers’ filing with the Tribunal came just a few hours after another twist in the takeover process.

Anthony Lacavera confirmed earlier on Friday that Globalive Capital took its $3.75-billion offer to buy Freedom Mobile directly to Shaw, in a move he hopes might convince Shaw to let the clock run out on its tie-up with Rogers.  

It marks a change in strategy for Lacavera, after earlier attempting to engage in talks with Rogers, which has been trying for more than a year to close its $20-billion takeover of Shaw.

In an interview Friday, Lacavera acknowledged Shaw is currently precluded from talking with Globalive about its offer for Freedom Mobile. However, he said if the Shaw family wants to avoid dragging out the regulatory process beyond the July 31 deadline that Rogers and Shaw have imposed on their deal, Globalive’s $3.75-billion offer for Freedom is there for the taking.

“We’re sure [Rogers and Shaw] are renegotiating that [deadline] again,” said Lacavera, who founded and chairs Globalive.

“And so we want to be clear that on the other side of that, they don’t have to agree to an extension. [Shaw] can accept the break fee or take a break fee from Rogers. They can sell us the wireless assets, and then may be free to sell the cable business to any potential buyer.”

Rogers and Shaw, however, have consistently stated they remain committed to their deal. And the July 31 so-called “outside date” has widely been described as a placeholder by analysts who recognize the likelihood of a protracted approval process.

A spokesperson for Rogers declined to comment on Globalive’s gambit Friday. A spokesperson for Shaw didn’t respond to requests for comment. Globalive's approach to Shaw was earlier reported by The Globe and Mail.

Lacavera — who rose to prominence in Canada's wireless market in 2009 by launching Wind Mobile, which was eventually sold to Shaw and rebranded as Freedom — said he has U.S. backers for his proposal.

In addition to the Competition Bureau, Rogers' takeover of Shaw also requires approval from the Ministry of Innovation, Science and Economic Development Canada.