TORONTO — A non-requested, non-binding proposal from the company behind digital-first news network Cheddar and MVPDs Suddenlink and Optimum this week teamed with one of North America’s largest media companies a bid to acquire the parent company of MVPD Atlantic Broadband — and an entity with 23 radio stations in Quebec and Ontario including CKBE “92.5 The Beat” in Montréal.
The recipient of the bid, which would present some major regulatory issues regarding the radio properties, now says its board of directors has flat-out rejected the offer.
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On Wednesday (9/2), Altice USA — without asking — presented an offer to Cogeco that would see the acquisition of all of its issued and outstanding shares.
Immediately upon consummating the deal, Altice USA would welcome Atlantic Broadband into a family of brands that includes Suddenlink and Optimum.
But, more importantly, all of the Canadian assets of Cogeco would be spun to the largest long-term shareholder of Cogeco. That would be the grandfathered media colossus that is Rogers Communications.
The unsolicited all-cash offer is valued at $7.8 billion USD ($10.3 billion CDN) — and pegs the Atlantic Broadband portion of the proposed transaction at $3.6 billion USD ($4.8 billion CDN). It also spelled out terms that included $612 million USD ($800 million CDN) expressly to Cogeco Executive Chairman Louis Audet and his Audet family for their ownership interests.
Altice USA CEO Dexter Goei said, “We greatly respect and appreciate the legacy the Audet family has created with Cogeco, building an iconic company across Canada and the U.S. that is driven by superior customer service and continuous investments in technology.”
Goei also called the offer “very attractive” for Cogeco.
Cogeco, and Audet, beg to differ. Following meetings of Cogeco Inc. and Cogeco Communications respective boards, and discussions with members of the Audet family, where a review of the unsolicited proposal was conducted, a strong “no” was the official response.
“Members of the Audet family unanimously reiterated that they are not interested in selling their shares,” a statement offered from Gestion Audem President Audet reads. The Audet family company that holds 82.9% of all Cogeco Communications. “The family takes pride in its stewardship role in both companies.”
While the U.S. focus on the unsolicited proposal is squarely on Atlantic Broadband, which is the eighth-largest MVPD in the nation and present in 11 states — including such locales as Miami Beach — the radio industry angle is a major development in Canada.
The reason is simple: Rogers, with 54 radio stations across Canada, has one big glaring hole. It owns no radio stations in Québec outright, with British Columbia, Alberta, Manitoba, Ontario and Nova Scotia its audio locales. Its Toronto stations include CHFI-FM, the heritage Adult Contemporary station; CHR/Pop “Kiss 92-5,” all-News CFTR-AM and Sports Talk “590 The Fan.”
The Cogeco properties include four major Montréal FMs: English-language Hot AC “The Beat,” one of the highest-rated radio stations on the continent; heritage French-language Top 40 CKOI-FM, French AC “Rythme 105.7,” and major French News/Talk CHMP-FM 98.5. Cogeco also owns two FMs in Quebec City, and six smaller cities.
Cogeco trades on the Toronto Stock Exchange and as of 3:11pm Eastern was up 1.5% to $93.59. As of 3:25pm ET, Altice USA (NYSE: ATUS) was down 5.6% to $27.05.
