Altice USA will not continue to pursue an acquisition of Canada’s Cogeco, having failed to win over its major shareholder before its C$11.1 billion (US$8.4 billion) offer expired.
The revelation will come as no surprise to anyone following the saga. The Audet family were clear and firm in their rejection of the unsolicited bid; they had no intention of selling.
“Our offer to acquire Cogeco in order to own Atlantic Broadband has expired and we do not intend to extend it. We remain committed to our growth strategy and continue to focus on opportunities to drive value for our shareholders,” Altice USA said in a statement to Telecoms.com.
As the statement indicates, Altice was never looking to acquire Cogeco itself. It had worked out a deal that would see it buy the company and then offload its domestic broadband operations to Rogers Communications – already a Cogeco shareholder – leaving Altice with Atlantic Broadband, which operates on the eastern seaboard of the US. Atlantic Broadband would have provided Altice with a valuable addition to its own footprint in the area at a cost of US$3.9 billion.
But it was not to be. After an initial bid totalling C$10.3 billion (US$7.8 billion) was rejected in September, Rogers embarked on a charm offensive (of sorts), offering to invest C$3 billion in Quebec if the deal was pushed through, but the Audets – whose Gestion Audem holding company claims 69% of Cogeco’s voting rights – were not amused, noting that Rogers would need to invest in its operations in the area anyway.
Adding a hefty premium to the offer price didn’t help either. “Since this is apparently not registering with Rogers and Altice, we repeat today that this is not a negotiating strategy, but a definitive refusal. We are not interested in selling our shares,” said Louis Audet, President of Gestion Audem, a month ago.
Not much wiggle room there. Altice’s self-imposed deadline to reach agreement with the Audets within a month mattered little against such a categorical refusal to engage. Thus this week’s comment from Altice that it has let that period expire was a foregone conclusion.
However, if there’s one thing we know about Altice, it’s that it has a certain hunger for expansion. Cogeco may be off the table, but the table won’t stay empty for long.