Quebecor loses insider trading lawsuit
Insufficient evidence against Groupe Videotron CEOTORONTO -- Quebecor Media on Thursday lost an insider trader suit brought in 2002 against former Groupe Videotron CEO Claude Chagnon.
At the heart of the suit was a bitter 2000 battle for Groupe Videotron between Rogers Communications, Canada's largest cable operator, and Quebecor Media, a major Quebec broadcaster and publisher keen to keep Groupe Videotron with local ownership.
Justice Brian Riordan of the Quebec Superior Court said that there was insufficient evidence to prove Chagnon traded stock on inside information about a possible takeover bid in 2000 for Groupe Videotron from Rogers Communications.
Quebecor Media, which eventually beat out Rogers' all-stock deal to acquire Groupe Videotron, said Chagnon was offered 1.2 million stock options exercisable at CAN$26.00 ($23.40) each when he knew Rogers was about to launch a bid.
Quebecor eventually purchased Groupe Videotron for CAN$45 ($40.50) a share as part of an all-cash offer, which represented a CAN$23.2 million ($20.6 million) profit for Chagnon.
Quebecor alleged Chagnon would have earned less of a profit had shareholders known earlier about the Rogers bid for Groupe Videotron.
Chagnon denied the allegations as groundless, arguing that the cable company's board of directors approved the stock options plan in 1999, before talk of a possible Rogers' takeover.