Rogers family boardroom drama unlikely to impact deal to buy Shaw
A boardroom tussle at Rogers Communications Inc is unlikely to hinder its C$20 billion ($16.16 billion) buy of Shaw Communications, analysts said, but the family drama is continuing at one of Canada’s biggest telecoms companies.
The board of Rogers on Thursday voted out Chairman Edward Rogers, son of the late founder Ted Rogers, after he tried to replace Chief Executive Officer Joe Natale with another executive.
Hours later, Edward Rogers said as chair of the Rogers Control Trust, the family-controlled entity that owns the majority of ownership shares in RCI, he would remove the five RCI board directors who acted against him.
Rogers’ move is the latest in a tumultuous period, during which he has been at odds with his sisters and mother, all of whom are also board directors and who backed Natale.
The company said on Friday that it had not received any documentation from its former chair with respect to the attempted removal of directors, and would consult with its lawyers about the legality of Edward Rogers’ move.
“The company is not aware of this mechanism ever having been utilized in respect of a public company in Canada,” Rogers Communications said in a statement.
J.P.Morgan analysts said they hoped the boardroom battle would not overshadow the timeline or approval process of the deal to buy smaller rival Shaw.
“We maintain our base case that Rogers will be able to close its transformative acquisition of Shaw in 1H22 following the divestiture of some or all of Shaw’s wireless business,” J.P.Morgan wrote in a note to investors.
While the company’s bid for Shaw would further boost its position in Canada’s highly concentrated telecoms market, it has attracted scrutiny from multiple government regulators over whether it will decrease competition.
Scotiabank analysts said they expect the deal to get regulatory approvals within the planned timeline of first half of next year.
The structure of the Rogers Control Trust is a unique feature among Canadian companies, said David Brown, a corporate governance consultant.
Normally each family member would control their individual shares, but Ted Rogers’ estate set up the trust to represent all the family members together, meaning the 97.5% of Class A ownership shares are controlled by the family trust vote as one.
The purpose seems to be to “avoid impasses (between family members) that would block any votes from getting through the organization,” Brown said, adding that the structure gives the chair of the trust “some pretty unprecedented powers.”
But, he said, Rogers is still accountable to the family.
“Edward is allowed to do what he’s doing until the rest of the family step in and stop him,” Brown said.
($1 = 1.2377 Canadian dollars)
(Reporting by Uday Sampath in Bengaluru; Editing by Sweta Singh and Arun Koyyur)
Walmart recalling 3,900 bottles of room spray due to possible dangerous bacteria- U.S. CPSC
Walmart Inc is recalling around 3,900 bottles of its Better Homes and Gardens-branded room spray due to the possible presence of a rare and dangerous bacteria, the U.S. Consumer Product Safety Commission (CPSC) said on Friday.
The U.S. Centers for Disease Control and Prevention has been investigating a cluster of four confirmed cases of melioidosis including two deaths in the country, although the source of these four infections has not been confirmed, the CPSC said.
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