Rogers to acquire Shaw Communications in C$26B deal

Mar. 15, 2021 7:19 AM ETShaw Communications Inc. (SJR), RCI, SJR.B:CA, RCI.B:CABy: Gaurav Batavia, SA News Editor59 Comments
  • 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

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