NEW YORK: Altice USA Inc. has presented a revised and enhanced offer to Cogeco Inc. (CGO) and Cogeco Communications Inc. (CCA) to acquire 100% of the issued and outstanding shares of Cogeco.
Altice USA has also revised its arrangement with the largest long-term shareholder of Cogeco, Rogers Communications Inc. to sell all the Canadian assets of Cogeco at an adjusted net price of C$5.2 billion, if its transaction with Cogeco is completed.
Upon completion of the overall transaction, Altice USA would own all the U.S. assets (Atlantic Broadband) of Cogeco, and Rogers would own the Canadian assets.
If Altice USA is unable to arrive at a mutually satisfactory agreement by November 18, 2020, or, at the very least, it does not see a clear path forward to completion of a transaction, this revised offer will be withdrawn.
Dexter Goei, Chief Executive Officer of Altice USA said: “We are pleased to present an incredibly attractive revised and enhanced offer for Cogeco that significantly rewards all shareholders and incorporates feedback from recent discussions with holders of subordinate voting shares.
“We encourage the Cogeco boards to act in the best interest of all shareholders and stakeholders as they thoughtfully consider this offer, and we respectfully request that the boards engage with us to discuss our proposal.”
The aggregate all-cash consideration offered for all of the outstanding shares of Cogeco including those owned by Rogers, is C$11.1 billion (US$8.4 billion). This includes C$5.1 billion (US$3.9 billion) to be paid by Altice USA for the U.S. assets.
The offer also includes C$123 per share for the remaining CGO subordinate voting shares and C$150 per share for the remaining CCA subordinate voting shares.
The all-cash offer by both Altice USA and Rogers is subject to entrance into definitive transaction agreements with Cogeco and the receipt of customary shareholder, corporate and regulatory approvals. Altice USA and Rogers are confident that the transaction would receive all required regulatory approvals on a timely basis.
Altice USA and Rogers anticipate closing the transactions within six to nine months after signing definitive agreements, following receipt of necessary approvals.
Altice USA’s share repurchase and net leverage targets for 2020 remain unchanged from this transaction.
Rogers will be entitled to receive the premium offered by Altice USA to all subordinate voting shareholders.
As a result, the net consideration to be paid by Rogers for the Canadian assets of Cogeco reflects a gross price of C$6.0 billion, less the premium on the shares currently held by Rogers of C$800 million, less the value of Rogers’ shares excluding the premium of C$1.5 billion, for net cash consideration of C$3.7 billion.
Rogers does not anticipate any need to issue equity as a result of this transaction and its current dividend is maintained.
This revised offer is in line with Altice USA’s previously stated objective to opportunistically grow through value-accretive acquisitions. The acquisition of Atlantic Broadband, if consummated, would allow Altice USA to build on its success with prior cable acquisitions in the United States and expand its operations across 11 states on the east coast of the United States, adjacent to its existing Optimum and Suddenlink footprints.
As part of Altice USA, Atlantic Broadband would benefit from enhanced scale, operating efficiencies and further investment support that are at the core of the Altice business model and strategy.
Altice USA’s commitment to innovation, best-in-class services, long-term network investments and customer service creates significant benefits and long-term value for customers, employees and shareholders.
Over the last 10 years, Rogers has invested more than C$2 billion in its wireless network in Quebec and offers wireless services across the province. In January, Rogers started the rollout of Canada’s first 5G network in Montreal, and expanded the Rogers 5G network to Quebec City, Gatineau and Trois-Rivières last month. Today, Rogers is the largest 5G network in Quebec and Canada, reaching 130 towns and cities.
After 35 years of building in Quebec, Rogers recently unveiled a C$3 billion investment proposal to bring connectivity, jobs and economic growth to Quebec should it be successful in its bid to acquire Cogeco’s Canadian assets. This proposal would build off Rogers’ base of 3,000 Quebec employees and nearly two million Quebec customers, and honour Cogeco’s legacy, expand rural connectivity, accelerate 5G coverage to 95% of Quebecers and create hundreds of highly skilled jobs with a new tech innovation hub. The proposal includes maintaining the Cogeco brand and maintaining Cogeco’s Quebec headquarters, bringing total direct employment to 5,000 jobs.
Altice USA (NYSE: ATUS) is one of the largest broadband communications and video services providers in the United States, delivering broadband, video, mobile, proprietary content and advertising services to more than 4.9 million residential and business customers across 21 states through its Optimum and Suddenlink brands.
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