Fourteen months into its bid to stitch up cable networks across the country by acquiring Shaw Communications Inc., Rogers Communications Inc. now faces the prospect of a court battle over the $26-billion deal after the federal Competition Bureau said it wants to block the merger.
Shaw’s stock dropped by more than seven per cent to close at $34.87 on Monday, well below the deal’s offer price of $40.50 per share. Rogers shares also closed down more than four per cent at $64.19. “Eliminating Shaw would remove a strong, independent competitor in Canada’s wireless market — one that has driven down prices, made data more accessible, and offered innovative services to its customers,” Commissioner of Competition Matthew Boswell said in a statement.
The telecom also said that it is “prepared to defend the transaction before the Competition Tribunal,” and “we will be filing our formal response in due course.” Quebecor Inc.’s owner and CEO Pierre Karl Péladeau has previously said he wants to expand his company’s wireless business outside of Quebec and the Globe and Mail and Bloomberg reported over the weekend that Rogers has recently asked Quebecor to consider bidding on Freedom Mobile.
“I think the government gave Rogers signals that were ignored,” Lacavera said Monday. “You would think that would have heeded warnings from the Competition Bureau, but they obviously didn’t.”
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