Rogers And Shaw Communications Deal Moves Forward After Almost 2 Years

Trending 9 months ago

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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.

Editor's Note: This nonfiction discusses 1 oregon much securities that bash not commercialized connected a large U.S. exchange. Please beryllium alert of the risks associated with these stocks.

I constitute the Special Situation Report. I look astatine peculiar situations similar spin-offs, stock repurchases, rights offerings and a batch of M&A events. The constituent is to marque wealth with risks nether control. Check it retired here. Follow maine connected Twitter here 

This nonfiction was written by

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Professional risk-taker focused connected astute bets and hazard control.

15 years of investing and I consciousness similar a rookie successful his archetypal twelvemonth astatine the academy. My roots are successful the worth schoolhouse but implicit clip I've learned to respect antithetic approaches. I'm funny successful what quants do, options traders do, and adjacent what WallStreetBets is doing (keep your friends adjacent and...)

I gravitate towards special-situations. That means situations astir companies oregon the marketplace wherever the terms tin determination successful a definite absorption based connected a circumstantial lawsuit oregon ongoing event. This eclectic and originative benignant of investing seems to suit my property and interests astir closely.

Since 2020 I big a podcast/videocast wherever I sermon (special-situation/event-driven) marketplace events and concern ideas with apical analysts, portfolio managers, hedge money managers, experts, and different concern professionals. I highly urge it (pick episodes astir topics that involvement you) for the astonishing guests that travel connected with regularity.

I've been penning for Seeking Alpha since 2013 aft playing p$ker (I'm not that immature but the existent connection gets censored) professionally. In 2018 I founded Starshot Capital B.V. A Dutch AIF manager. Follow maine connected Twitter @Bramdehaas oregon email maine Dehaas.Bram astatine Gmail

Disclosure: I/we person a beneficial agelong presumption successful the shares of SJR either done banal ownership, options, oregon different derivatives. I wrote this nonfiction myself, and it expresses my ain opinions. I americium not receiving compensation for it (other than from Seeking Alpha). I person nary concern narration with immoderate institution whose banal is mentioned successful this article.

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