Rogers Communications Inc. says it has increased its stake in Canada's fourth-largest cable company, Cogeco Cable Inc. and its parent Cogeco Inc.
Rogers says it will spend a total of $163-million in cash, plus commissions, to increase its minority stakes in the two Montreal-based companies, which are controlled by the founding Audet family through multiple-vote shares.
The Cogeco cable systems serve communities in an area that stretches from the tip of southwestern Ontario to the Gaspé region in Quebec.
As a result, Cogeco is Ontario's second-largest cable provider after Rogers, and Quebec's second-largest cable company after Quebecor Inc. 's Vidéotron.
Nationally, Cogeco ranks behind Rogers, Shaw Communications Inc. and Vidéotron among Canada's largest cable TV operators.
Toronto-based Rogers, which has had a minority stake in Cogeco for a number of years, said it will own nearly one-third of the equity of Cogeco Inc. and about one-fifth of Cogeco Cable after the transactions.
Rogers said it has agreements to buy about 3.2 million subordinate voting shares of Cogeco Cable and about 1.62 subordinate voting shares of Cogeco Inc. It will pay $36.43 per share for the Cogeco Cable shares, or $116.6-million in total, and $28.61 per share for the parent company's shares, or $46.4-million.
That's above the recent market price for Cogeco Cable subordinate shares, which gained $2.26, or nearly 7 per cent to $35.70 after the announcement. But the price was below the market price for Cogeco Inc., which fell 55 cents to $30.57 after the Rogers announcement.
After the purchases, Rogers will own nearly 9.8 million subordinate voting shares of Cogeco Cable Inc. representing 29.8 per cent of the subordinate voting shares and approximately 20.2 per cent of the equity.
Rogers will also own about five million subordinate voting shares of Cogeco Inc., representing approximately 33.6 per cent of the subordinate voting shares and approximately 29.9 per cent of the equity of Cogeco Inc.
Although talk of a Rogers takeover of Cogeco has been dormant for several years, there has been in the past considerable speculation that Rogers would go after the Montreal-based company after a failed attempt to move into the Quebec market through a purchase of Vidéotron.
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