- Rogers Communications (NYSE:RCI) to acquire all of Shaw’s (NYSE:SJR) outstanding Class A Shares and Class B Shares for ~C$26B inclusive of ~C$6B of Shaw debt.
- The offer price of C$40.50 per share in cash, amounting to approximately C$20B, reflects a premium of approximately 70% to Shaw’s recent Class B Share price.
Transaction of C$26B is equivalent to 10.7x 2021 Calendar Year EBITDA based on latest consensus estimates, or 7.6x post synergies.
Rogers has secured committed debt financing, which it will use along with balance sheet cash and the issuance of 23.6 million shares to the Shaw Family Living Trust.
- Synergies are expected to exceed C$1 billion annually within two years of closing, and the transaction will be significantly accretive to earnings and cash flow per share as of the first year after closing.
- Rogers will invest C$6.5 billion in Western Canada to build critically needed 5G networks, connect underserved rural and Indigenous communities, and bring added choice to customers and businesses.
- Pro forma leverage on closing is expected to be just over 5x and Rogers pro forma dividend payout ratio declines to below 30% within 24 months of close.
- Shaw family will become one of the largest shareholders in Rogers.
- The Shaw Family Living Trust, the controlling shareholder of Shaw, and certain members of the Shaw family, will receive 60% of the consideration for their shares in the form of 23.6 million Class B Shares of Rogers and the balance in cash.
- Shaw will continue to pay its regular monthly dividends of C$0.098542 in cash per Class A Share and C$0.09875 in cash per Class B Share, and its regular quarterly dividend on its preferred shares in accordance with their terms.
- The transaction has been unanimously approved by the Shaw’s Board of Directors.
- SJR +64% premarket.
- Source: Press Release