With the expiration of an US$8.4 billion play for the Cogeco group, investors are asking what’s next for rival Rogers Communications Inc.

Rogers, Canada’s no. 3 cable and wireless firm by market value, teamed up with Altice USA Inc. to launch a hostile takeover bid for Quebec-based Cogeco Inc. and subsidiary Cogeco Communications Inc. When the controlling Audet family rejected the offer, they upped the price -- but the family stood firm and wouldn’t negotiate. The offer runs out today.

“We’re disappointed that we didn’t get the ability to engage with either the Audet family or the Cogeco boards on what is a terrific offer, a highly valued offer,” Rogers Chief Executive Officer Joe Natale said Wednesday at an industry conference.

However, expanding operations in Quebec is still an option, he said. “We continue to leverage the business we have in Quebec. We’ve been there for 35 years and we’ll continue to build.”

Rogers owns 41 per cent of the subordinate voting shares of Cogeco Inc. and 33 per cent of the subordinate voting shares of Cogeco Communications, according to a Sept. 2 statement. Natale said on Oct. 22 that Rogers would revisit the investment if the deal didn’t go through, but did not explicitly say whether it would sell the stock. The board would “review our capital allocation priorities,” he told analysts.

Shares of both Cogeco companies have erased gains posted the day of the hostile bid. Cogeco Inc. is down 24 per cent this year and Cogeco Communications is down 17 per cent.

“On our side, nothing has changed,” Cogeco spokesperson Nancy Bouffard said in an email Monday. “We continue to focus on growing our business and building long-term value for all our stakeholders.”

Doomed to Fail

Rogers’ interest in Cogeco began decades ago, when founder Ted Rogers took on a minority stake. Any aspirations to take over the firm were limited by the Audets, whose holding company, Gestion Audem, controls the voting rights.

Some analysts had speculated Altice’s support might tip the scales. The American firm is controlled by French-Israeli billionaire Patrick Drahi who has a track record pulling off difficult M&A transactions. Instead, communications among the three firms became increasingly testy. Louis Audet, Cogeco’s executive chairman and son of its founder, made it known the family was not interested in ceding control of the organization they built.

“It became very clear early on that the family was not going to sell,” University of Toronto business professor Richard Powers said. “I don’t think they could have offered anything that would have convinced them of that.”

Rogers must have thought a hostile offer had a chance of succeeding or they wouldn’t have embarked on it, Powers said. “This wasn’t just a foolish gambit by Rogers,” he said. “They obviously had some information that would suggest that there was an opportunity here and they went at it full force.”

Ultimately, family legacy proved more important for Cogeco, said Bloomberg Intelligence analyst John Butler. “If your whole life is wrapped up into a company that you built over the years, and it’s providing more than suitable compensation, why sell?”

For industry watchers, it’s now a waiting game to see if Rogers sells all or part of its Cogeco investment. “We’ll see if we hear about any next steps by Rogers before or with its 4Q reporting in January,” National Bank of Canada analyst Adam Shine said in an email.