Altice USA, a subsidiary of French tycoon Patrick Drahi's media and telecoms empire, made a takeover bid for Canadian telecommunications group Cogeco for US$7.8 billion (Can$10.3 billion).
A side deal would see Altice, which is primarily interested in the Montreal-based firm's Atlantic Broadband operations in the US, sell Cogeco's Canadian assets to Rogers, which already has a significant stake in the telecom. The unsolicited offer, however, was quickly rejected by Cogeco's controlling shareholder, Montreal's Audet family.
Created in 1957 by Henri Audet, Cogeco is the second largest cable distributor in Ontario and Quebec, where it provides internet, video and telephone services, and is present in 11 states on the US east coast.
“We greatly respect and appreciate the legacy the Audet family has created with Cogeco, building an iconic company across Canada and the US that is driven by superior customer service and continuous investments in technology,” said Altice USA chief executive officer Dexter Goei in a release.
“We are pleased to present this very attractive offer for Cogeco, and are confident that Audet and the Cogeco boards will act in the best interest of all shareholders and fairly evaluate this offer.”
Cogeco said its board would consider the offer, but added that the Audet family through its holding company Gestion Audem Inc. “has already indicated that it does not intend to sell its shares and will not support the proposal.”
The offer aims to build on Altice USA's strategy of growth through acquisition. If it goes through, the acquisition of Atlantic Broadband would allow Altice USA to add more than 1.1 million additional customers, while Rogers - for its US$3.6 billion (Can$4.8 billion) investment - would expand its footprint into 1.8 million homes and businesses.
It would be Altice USA's fourth cable acquisition in the US market, following the takeovers of Cequel Corporation (Suddenlink) in 2015, Cablevision Systems Corporation (Optimum) in 2016 and Service Electric Cable TV of New Jersey in July.
