Altice USA Offers $7.8 Billion Deal for Canada's Cogeco

Dexter Goei - Publicity - H 2018
Courtesy of Altice USA

Altice USA CEO Dexter Goei

The U.S. cable company wants to keep Cogeco's U.S. business, Atlantic Broadband, for $3.6 billion and sell its Canadian business to rival Rogers Communications.

Altice USA, led by CEO Dexter Goei, on Wednesday unveiled a $7.8 billion offer to acquire Canadian cable giant Cogeco Co. with the goal of keeping its U.S. assets, which operate under the name Atlantic Broadband, for $3.6 billion.

As part of the cross-border deal, Altice USA has offered to sell Cogeco's Canadian cable TV business, controlled by Quebec's Audet family, to rival Rogers Communications. But Cogeco was quick to reject the unsolicited offer from Altice USA and Rogers Communications that it received late Tuesday.

"The non-binding proposal of Altice USA and Rogers Communications, which was pre-emptively announced today by Altice and Rogers, has been reviewed by Gestion Audem Inc., a company controlled by the members of the Audet family holding 69 percent of all voting rights of CGO, which in turn controls 82.9 percent of all voting rights of CCA. Gestion Audem Inc. has already indicated that it does not intend to sell its shares and will not support the proposal," Cogeco said in a statement.

Atlantic Broadband is the ninth largest U.S. cable operator, with assets in Connecticut, Delaware, Florida, Maine, Maryland, New Hampshire, New York, Pennsylvania, South Carolina, Virginia and West Virginia.

"We are pleased to present this very attractive offer for Cogeco, and are confident that Mr. (Louis) Audet and the Cogeco boards will act in the best interest of all shareholders and fairly evaluate this offer," Goei said. "We look forward to the opportunity to extend Altice USA’s high-quality broadband, video, mobile, and news offerings to more than 1.1 million additional homes and businesses."

Rogers already owns 41 percent of the voting shares in Montreal-based Cogeco, which operates mostly in Ontario and Quebec. "Rogers is excited about the opportunity to expand its breadth of industry leading technologies and products to an additional 1.8 million homes and businesses," said Joe Natale, president and CEO of Rogers.

The deal by Rogers for Cogeco will require the approval of the CRTC, Canada's telecom and TV regulator, and is also conditional on Altice USA acquiring Atlantic Broadband.

Sept. 2, 9 a.m. Updated with a response by Cogeco Inc. and its controlling shareholders to the takeover offer from Altice USA and Rogers Communications.