Rogers, Shaw Delay Deal Again as Minister Takes His Time

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(Bloomberg) — Rogers Communications Inc. and Shaw Communications Inc. pushed back the deadline to close their merger again, to Feb. 17, after a Canadian government minister said he needs more time to decide whether to approve the deal.

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The C$20 billion ($15 billion) transaction had an original deadline of last June, which later was moved to Jan. 31 as the companies fought an antitrust challenge. Last week, the Federal Court of Appeal rejected arguments by Canada’s competition watchdog to block it, ending a monthslong legal battle. 

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The deadline for a related deal — Quebecor Inc.’s acquisition of most of Shaw’s wireless business — was also moved to Feb. 17. Quebecor has agreed to meet the government’s demands on wireless prices in Western Canada and Ontario as part of that transaction. 

Shaw rose 3 Canadian cents to C$39.71 as of 9:39 a.m. in Toronto. Rogers has offered C$40.50 a share. 

Industry Minister Francois-Philippe Champagne has said he’ll require Quebecor to hold Shaw’s wireless licenses for at least 10 years, a nod to critics who have said the Montreal-based company might be tempted to flip the Shaw business for a profit rather than manage it for the long haul.  

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Champagne told the Toronto Star that he’s reviewing the details of the transactions to ensure promises made by the three companies “are binding, and that there would be consequences” if they fail to meet them. Rogers has made a number of commitments including large investments to improve communications networks in rural and remote regions of Canada. 

“The extension should not be a big surprise given the minister will want to hammer out details with the companies before approving the transfer of licenses,” said Frederic Boucher at Susquehanna International Group. At this point, the market is pricing in roughly 95% probability of the takeover closing, the risk arbitrage analyst said.

(Updates with share price, comment from analyst, additional details about transaction)