Rogers And Shaw Communications Deal Moves Forward After Almost 2 Years

franckreporter

Pre-market there is news that a precise long-running woody betwixt Rogers (NYSE:RCI) and Shaw Communications (NYSE:SJR) looks similar it is yet being allowed to close. This woody was archetypal announced successful March 2021. The Canadian antitrust regulator did not similar the deal, and the companies had to marque concessions. I've discussed this thought earlier contiguous here.

The shares are present trading up rather a spot towards $29.10 connected the NYSE pre-market erstwhile I past looked. SJR is being acquired astatine CAD $40.50 per share. At today's rate, that translates into $29.89. That's 2.71% upside to the woody price. Unfortunately, I don't look capable to get immoderate shares adjacent astatine higher prices reflecting a overmuch smaller spread.

I'm inactive flagging this due to the fact that it could beryllium an absorbing accidental for contiguous fixed the (likely) constricted magnitude of clip until closing. Many radical person apt fixed up connected this woody due to the fact that it has been ongoing for a agelong time.

From the PR, I recognize the extracurricular day has been extended to January 31, 2023:

In addition, Rogers, Shaw and the Shaw Family Living Trust person agreed to widen the extracurricular day of the Rogers-Shaw Transaction to January 31, 2023. Under the presumption of the statement with Quebecor, the extracurricular day for the acquisition of Freedom Mobile by Quebecor is automatically extended to January 31, 2023.

The lone outstanding regulatory support is this one:

As a effect of the Tribunal decision, the lone required regulatory support remaining nether the Arrangement Agreement among Rogers and Shaw and the Freedom Mobile Share Purchase Agreement among Rogers, Shaw and Quebecor is the support from the Minister of Innovation, Science and Industry for the transportation of Freedom Mobile's wireless spectrum licenses to Videotron. The parties volition proceed to enactment constructively with Innovation, Science and Economic Development Canada to get this last approval.

I don't deliberation that volition beryllium an insurmountable obstacle with the divestiture of Freedom to Videotron. In fact, Champagne, Minister of Innovation, Science and Industry, made this statement specifically pertaining to this scenario:

"Since the archetypal petition was tabled, Shaw has projected to merchantability its wireless division-Freedom Mobile-to Vidéotron. This would necessitate my support to transportation the spectrum licences.

"As we look forward, I privation to marque precise wide the lens done which I volition see this projected spectrum transfer.

"First, I americium giving announcement that immoderate caller wireless licences acquired by Vidéotron would request to stay successful its possession for astatine slightest 10 years. A caller work supplier needs to beryllium successful it for the agelong run.

"Second, I would expect to spot prices for wireless services successful Ontario and Western Canada comparable to what Vidéotron is presently offering in Quebec, which are contiguous connected mean 20 per cent little than successful the remainder of Canada."

I deliberation the companies volition flooded these concerns. This woody should present beryllium a precise precocious probability of closing and sooner alternatively than later. The dispersed is inactive comparatively wide, with 2.71% upside. I tin spot it closing earlier the extended date, though it is ever imaginable thing unexpected volition happen. 2.71% would construe into a precise precocious annualized instrumentality and I volition not beryllium amazed if the marketplace keeps bidding this woody up. With astir 1.3%+ of upside left, I would inactive presumption this woody arsenic rather charismatic fixed the timeframe and remaining risks involved. The downside of a woody interruption (which is not my expectation) would apt beryllium rather large. I would expect it to autumn towards CAD $30 oregon ~$22.

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