Rogers Communications Inc.NYSE
Rogers Communications: Undervalued Canadian Large-Cap Cable Co. With 40% Upside
Nilanjan Roy • 41 Comments
Nilanjan Roy • 41 Comments
Tue, Sep. 27, 1:33 PM
- Rogers Media (RCI +0.8%) has agreed to acquire Tillsonburg Broadcasting Co., a broadcaster serving Southwestern Ontario.
- The deal helps fill out Rogers' radio footprint in the region. TBCL serves not only Tillsonburg but major centers including London, Kitchener-Waterloo, Woodstock and St. Thomas.
- Part owner and GM Carolyn Lamers will stay with the Lamers family-owned stations to assist in the transition.
- Subject to Canadian regulatory approval, the deal is expected to close by early 2017.
Tue, Mar. 1, 5:12 PM
- Shaw Communications (SJR +2.6%) has closed on its C$1.6B acquisition of Mid-Bowline Group, and thus its purchase of Wind Mobile, launching its entry into the wireless business.
- Wind -- the No. 4 provider in the market -- is Canada's biggest non-incumbent wireless firm, with about 940,000 subscribers in Ontario, British Columbia and Alberta.
- Shaw had said earlier this month that it had fully committed financing for the deal, and it had been cleared by all major government boards. The company closed on a C$300M debt offering that could go toward helping fund the deal.
- Elsewhere in Canadian telecom: TU +1.5%; BCE +1.2%; RCI +2.2%.
Dec. 1, 2015, 11:25 AM
- Rogers Communications (RCI -0.6%) has acquired Internetworking Atlantic in order to boost its business/public sector offerings in Atlantic Canada.
- The acquisition means acquiring an extensive fiber footprint in the area, along with a Halifax-based data center that expands the company's roster to 16 facilities.
- The new employees mean a working professional services team and an existing offering of cloud services. Internetworking Atlantic offers infrastructure-as-a-service capability in virtual and hosted services.
- "This strategic investment is key to supporting our growing client base, particularly in the large and medium business sectors," says Rogers' Ken Marshall.
Jul. 2, 2015, 5:35 PM
- Rogers Communications (RCI +0.2%) has wrapped up its acquisition of Mobilicity, as well as its deal to buy AWS wireless spectrum from Shaw Communications (NYSE:SJR).
- The company had agreed to pay C$440M (about $350.8M today) for the mobile provider, and C$100M additional (about $79.7M) to close on Shaw's airwaves. Rogers had previously paid $250M for a purchase option on the spectrum.
- With the deal complete, Rogers will gain access to new capacity in key markets in British Columbia, Alberta and Ontario.
- Previously: Rogers-Mobilicity deal: Getting airwaves from Shaw, selling to Wind (Jun. 24 2015)
- Previously: Rogers to buy bankrupt Mobilicity for $378M (Jun. 24 2015)
Jun. 24, 2015, 12:02 PM
- With Rogers Communications (RCI +1.6%) confirming that it's buying Mobilicity -- for C$440M (about $355M) -- it's also paying C$100M to wrap a deal to buy airwaves from Shaw Communications (SJR -0.9%) and says it will sell some spectrum to Wind Mobile, an unsurprising move to seal regulator OKs.
- The deals mean new airwaves for Rogers in population centers of British Columbia, Alberta and Ontario. "We're basically adding multiple lanes on our wireless highway in three key markets overnight," says CEO Guy Laurence.
- Rogers had previously paid $250M to acquire the purchase option for Shaw's spectrum.
- The Wind deal may encourage regulators who may see it as the most viable competition for Rogers, BCE (BCE -0.4%) and Telus (TU +0.2%).
- Rogers is offsetting some of the Mobilicity purchase price by tax losses of around C$175M.
Jun. 24, 2015, 9:13 AM
- Rogers Communications (NYSE:RCI) won the race to buy bankrupt Mobilicity, for C$465M (about $378M) -- well above reported figures, court documents show.
- It outpaced competitor Telus (NYSE:TU) for the deal, which still needs an OK from the government and bankruptcy regulators. The government had previously blocked Telus deals for Mobilicity.
- Speculation had one of the two Canadian carriers set to spend perhaps more than C$300M. Mobilicity has about 157K customers in Canada.
- Previously: Report: Telus, Rogers both close to C$300M deal to buy Mobilicity (Jun. 19 2015)
Dec. 26, 2014, 2:06 PM
- BCE (BCE +0.7%) and Rogers (RCI +1.1%) will each own 50% of Glentel following the closing of the BCE/Glentel deal. Rogers will pay half of BCE's purchase price in cash - BCE has committed to paying $594M for Glentel's equity, and assuming $78M in debt.
- Following the purchase, Glentel will continue "operating as a standalone entity with independent management." The BCE/Glentel deal is still expected to close in Q1 2015.
- Earlier: BCE, Rogers to jointly own Glentel's Canadian retail ops
Dec. 26, 2014, 8:02 AM
- Glentel, Canada's biggest independent phone retailer, will see its Canadian retail ops jointly owned by BCE and rival Rogers (NYSE:RCI) once BCE's $670M acquisition of Glentel closes.
- The carriers proclaim the JV guarantees Canadians "will continue to be able to choose a wide variety of wireless products and services at GLENTEL's 494 retail locations across Canada."
- Glentel also owns/operates/franchises 735 retail locations in the U.S., and 147 in Australia and the Philippines. Prior to the agreement, Rogers had been seeking a court injunction to block the BCE/Glentel deal.
Sep. 15, 2014, 5:43 PM
- VimpelCom (NASDAQ:VIP) is close to selling its stake in Canadian wireless carrier Wind Mobile Canada to Toronto-based Globalive Wireless Management for ~C$300M ($270M), with an announcement expected as soon as tomorrow, according to various reports.
- A deal would cap VIP's struggle to exit the Canadian market following a lengthy regulatory spat over Canada's foreign investment rules.
- A sale also would boost the Canadian government’s effort to create a fourth national wireless carrier to help foster competition and reduce mobile phone rates; the three biggest carriers, Rogers Communications (NYSE:RCI), BCE and Telus (NYSE:TU), together control 90% of the market.
Jun. 13, 2014, 3:30 AM
- BlackBerry (BBRY) has reached an agreement with EnStream, a joint venture between Canada's three biggest telecom companies — Bell (BCE), Rogers (RCI) and Telus (TU), to provide the infrastructure for a new mobile payment platform.
- Under the three-year deal, EnStream will use BlackBerry infrastructure so banks and mobile operators can securely keep sensitive payment information on any smartphone able to use near field communication (NFC) tags.
- NFC tags permit smartphones to communicate with other mobile devices or credit payment systems by tapping the two together.
Sep. 23, 2013, 10:05 AM
- Rogers (RCI +1.6%) is acquiring Pivot Data Centers, owner of facilities in Calgary and Edmonton, from P-E firm Sverica International for C$155M ($150M). (PR)
- Pivot's data centers specialize in colocation services. The colocation market has been growing at a decent pace, but is also starting to be pressured by the rise of public cloud infrastructure platforms such as Amazon Web Services and Windows Azure.
Sep. 12, 2013, 2:55 PM
- In spite of hedge fund opposition, Vodafone (VOD +0.7%) says 75% of Kabel Deutschland shares have been voted in favor of the mobile's carrier's €87/share offer for the German cable provider, clearing the way for the deal to close.
- Altogether, Vodafone is paying €10.7B ($14.2B) for Kabel (€7.7B in cash + $3B in assumed debt). The Verizon Wireless windfall should make the purchase pretty easy to digest. Vodafone has said the deal will grow the size of its German revenue base to €11.5B/year ($15.3B/year).
- Separately, Vodafone U.K. CEO Guy Laurence is leaving to become the CEO of Canadian carrier Rogers (RCI -1.4%). U.K. enterprise exec Jeroen Hoencamp will replace Laurence.
- Rogers' hiring of Laurence comes 7 months after the company' current CEO, Nadir Mohamed, announced plans to retire in Jan. '14. Laurence will take over the top job on Dec. 2.
Sep. 3, 2013, 4:25 AM
- Verizon Communications (VZ) has reportedly started syndicating a $61B one-year bridge loan that will support the company's $130B acquisition of 45% of Verizon Wireless from Vodafone.
- Verizon intends to help pay for the deal with $49B in bonds and $14B in other debt, but might need the bridge loan if it can't issue the bonds by the time the transaction closes, which is expected in Q1 2014. The $63B in funding will replace the bridge loan.
- JP Morgan (JPM), Morgan Stanley (MS), Bank of America (BAC) and Barclays (BCS) are leading the financing and underwriting the deal.
- Meanwhile, Verizon has no plans to enter the Canadian market. The carrier had been linked with a couple of struggling wireless start-ups. The news should be positive for Canada's three largest telecom operators - BCE (BCE), Rogers Communications (RCI) and Telus (TU) - whose shares tumbled in response to Verizon's expansion plans in Canada and then climbed on initial reports of the Vodafone deal.
Aug. 29, 2013, 12:01 PM
- Rogers (RCI +2.8%), BCE (BCE +1.9%), and Telus (TU +2.8%) are all posting solid gains after Bloomberg reported Verizon is in advanced talks to buy Vodafone's 45% Verizon Wireless stake for $130B and plans to partly finance the deal by raising $60B in debt, and Vodafone subsequently confirmed it's talking to Big Red.
- Investors are betting the deal's enormous price tag will make Verizon (VZ +3.4%) hold off on its Canadian expansion plans for now. Verizon already had $49.8B in debt on its balance sheet at the end of Q2, offset only a little by $5.7B in cash/investments.
- The Globe and Mail recently reported Verizon has decided to hold off on making bids for smaller Canadian carriers until a January spectrum auction concludes.
- Meanwhile, Nomura believes even a $130B deal for Vodafone's stake would be accretive for Verizon, since it would still only value Verizon Wireless at 8.5x 2013E EBITDA. The firm thinks Verizon would trade at 7x 2014E EBITDA and 2.3x net debt/EBITDA (a ratio deemed "manageable") following a $130B deal half-paid in cash.
- Judging by today's move in Verizon shares, investors also think the positives outweigh the negatives. Is Verizon getting a good deal on a premium asset - while Verizon's wireline revenue continues to slowly decline, Verizon Wireless is still growing and gaining share - or is Vodafone smartly selling high as U.S. mobile growth slows and competition intensifies?
Aug. 15, 2013, 9:18 AM
- Sources tell The Globe and Mail, which appears to have a good handle on Verizon's (VZ) Canadian expansion plans, Verizon has decided to delay making bids for smaller local carriers Wind (65%-owned by VIP) and Moblicity until a January spectrum auction is finished.
- The paper adds Verizon "will focus on deciding whether to participate" in the auction. The change of heart that suggests the carrier could be having second thoughts about expanding north, or might simply be trying to drive a harder bargain (either with the carriers or regulators).
- A previous report claimed Verizon had made a ~$700M offer for Wind, and had held talks with Moblicity.
- BMO has argued a Canadian acquisition would pay for itself just via roaming fee savings. Incumbent Canadian carriers (BCE, RCI, TU) have been less than thrilled about Verizon's plans, and apparent government support for them.
Jul. 29, 2013, 12:01 PM
- A group representing 150 Canadian CEOs has sent a letter to PM Stephen Harper asking him to reconsider new mobile investment rules they claim would give would-be entrant Verizon (VZ +0.6%) and unfair edge over incumbents BCE (BCE +0.3%), Rogers (RCI +1.1%), and Telus (TU +0.9%).
- The incumbents have already been aggressively lobbying Ottawa to fix perceived loopholes in telecom policy they claim benefit outside giants, rather than smaller carriers.
- Verizon, possibly motivated by the potential for huge roaming fee savings, is believed to be eying the purchase of struggling Canadian carriers Wind and Mobilicity, whom the incumbents can't acquire due to spectrum rules.
- Big Red is also considering taking part in a Jan. '14 spectrum auction; the rule changes would allow it to buy more spectrum than the incumbents.