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'Not a negotiating strategy:' second offer to take over Cogeco rejected – CP24 Toronto's Breaking News

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Nicole Thompson, The Canadian Press


Published Sunday, October 18, 2020 8:13PM EDT


Last Updated Sunday, October 18, 2020 9:10PM EDT

TORONTO – The family that controls the Cogeco companies roundly rejected another takeover offer from Altice USA and Rogers Communications on Sunday night.

It was the second “unsolicited” offer the Audet family has rejected in as many months, and comes weeks after Cogeco’s board sent a letter to the CEOs of both Rogers and Altice, accusing them of “bad faith tactics.”

“Since this is apparently not registering with Rogers and Altice, we repeat today that this is not a negotiating strategy, but a definitive refusal,” said Louis Audet, president of the family’s holding company, Gestion Audem, in a statement released late Sunday. “We are not interested in selling our shares.”

Under the new offer, Altice said it would pay $11.1 billion cash to buy all the shares of Cogeco Communications Inc. and its parent Cogeco Inc., including $900 million to buy the Audet family’s multiple voting shares and their subordinate shares.

That’s up from the previous offer of $10.3 billion, announced last month.

In both scenarios, Altice USA said it planned to keep only Cogeco’s U.S. cable assets and sell its Canadian assets to Rogers, which wants to expand its cable and internet territory in Ontario and make its entry into the Quebec cable and internet market.

The price Rogers would get for its Cogeco shares would have risen to $5.2 billion from $4.9 billion.

Altice’s revised offer included $123 per share for all the remaining subordinate voting shares of Cogeco Inc. and $150 per share for all the remaining subordinate voting shares of Cogeco Communications, which are publicly traded on the Toronto Stock Exchange.

Gestion Audem holds 69 per cent of all voting rights of Cogeco Inc., which in turn controls 82.9 per cent of all voting rights of Cogeco Communications Inc.

After their first offer was rejected, Altice and Rogers accused the Audet family of failing to properly review or consider the proposal.

In his response, the lead director of Cogeco’s boards outlined what he contends were tactics meant to confuse and mislead investors.

“From the outset, you have engaged in bad faith tactics, some of which created confusion in the market,” James C. Cherry wrote. “…You publicly announced your proposal in which you said that the support of the Audet family was necessary to complete a transaction, yet you failed to disclose that they had rejected your proposal the prior evening.”

He wrote that Cogeco gave the initial offer all the “due care and attention it deserves.”

“We will not engage in a futile exercise aimed at diverting the attention of management and key resources from our business operations while creating friction among our stakeholders,” he wrote.

This report by The Canadian Press was first published Oct. 18, 2020

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Lee Kun-Hee, force behind Samsung's rise, dies at 78 – Business News – Castanet.net

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Lee Kun-Hee, the ailing Samsung Electronics chairman who transformed the small television maker into a global giant of consumer electronics but whose leadership was also marred by corruption convictions, died on Sunday. He was 78.

Lee died with his family members by his side, including his only son and Samsung Vice Chairman Lee Jae-yong, the company said in a statement.

Samsung didn’t announce the cause of death, but Lee had been hospitalized since May 2014 after suffering a heart attack and the younger Lee has been running Samsung, South Korea’s biggest company.

“All of us at Samsung will cherish his memory and are grateful for the journey we shared with him,” the Samsung statement said. “His legacy will be everlasting.”

South Korean President Moon Jae-in sent senior presidential officials to pass a condolence message to Lee’s family at a mourning site. In the message, Moon called the late tycoon “a symbol of South Korea’s business world whose leadership would provide courage to our companies” at a time of economic difficulties caused by the coronavirus pandemic, Moon’s office said.

Lee’s family said the funeral would be private but did not immediately release details.

Lee inherited control of the company from his father, and during his nearly 30 years of leadership, Samsung Electronics Co. became a global brand and the world’s largest maker of smartphones, televisions and memory chips. Samsung sells Galaxy phones while also making the screens and microchips that power its major rivals — Apple’s iPhones and Google Android phones.

Its businesses encompass shipbuilding, life insurance, construction, hotels, amusement parks and more. Samsung Electronics alone accounts for 20% of the market capital on South Korea’s main stock exchange.

Lee leaves behind immense wealth, with Forbes estimating his fortune at $16 billion as of January 2017.

His death comes during a complex time for Samsung.

When he was hospitalized, Samsung’s once-lucrative mobile business faced threats from upstart makers in China and elsewhere. Pressure was high to innovate its traditionally strong hardware business, to reform a stifling hierarchical culture and to improve its corporate governance and transparency.

Like other family-run conglomerates in South Korea, Samsung has been credited with helping propel the country’s economy to one of the world’s largest from the rubbles of the 1950-53 Korean War. But their opaque ownership structure and often-corrupt ties with bureaucrats and government officials have been viewed as a hotbed of corruption in South Korea.

Lee Kun-Hee was convicted in 2008 for illegal share dealings, tax evasion and bribery designed to pass his wealth and corporate control to his three children. In 1996, he was convicted of bribing a former president. But in both cases, he avoided jail after courts suspended his sentences, at the time a common practice that helped make South Korean business tycoons immune from prison despite their bribery convictions.

Most recently, Samsung was ensnared in an explosive 2016-17 scandal that led to South Korean President Park Geun-hye’s ouster and imprisonment.

Lee Jae-yong was sentenced to five years in prison in 2017 for offering 8.6 billion won ($7 million) in bribes to Park and one of her confidants to help secure the government’s backing for his attempt to solidify control over Samsung. He was freed in early 2018 after an appellate court reduced his term and suspended the sentence. But last month, prosecutors indicted him again on similar charges, setting up yet another protracted legal battle.

Lee Kun-Hee was a stern, terse leader who focused on big-picture strategies, leaving details and daily management to executives.

His near-absolute authority allowed the company to make bold decisions in the fast-changing technology industry, such as shelling out billions to build new production lines for memory chips and display panels even as the 2008 global financial crisis unfolded. Those risky moves fueled Samsung’s rise.

Lee was born on Jan. 9, 1942, in the southeastern city of Daegu during Japan’s colonial rule of the Korean Peninsula. His father, Lee Byung-chull, had founded an export business there in 1938, and following the Korean War, he rebuilt the company into an electronics and home appliance manufacturer and the country’s first major trading company.

When Lee Kun-Hee inherited control of Samsung from his father in 1987, Samsung was relying on Japanese technology to produce TVs and was taking its first steps toward exporting microwaves and refrigerators.

A decisive moment came in 1993 when Lee Kun-Hee made sweeping changes to Samsung after a two-month trip abroad convinced him that the company needed to improve the quality of its products.

In a speech to Samsung executives, he famously urged, “Let’s change everything except our wives and children.”

Not all his moves succeeded.

A notable failure was the group’s expansion into the auto industry in the 1990s, in part driven by Lee Kun-Hee’s passion for luxury cars. Samsung later sold near-bankrupt Samsung Motor to Renault. The company also was frequently criticized for disrespecting labour rights. Cancer cases among workers at its semiconductor factories were ignored for years.

Earlier this year, Lee Jae-yong declared that heredity transfers at Samsung would end, promising the management rights he inherited wouldn’t pass to his children. He also said Samsung would stop suppressing employee attempts to organize unions, although labour activists questioned his sincerity.

The 52-year-old Lee expressed remorse for causing public concern over the 2016-17 scandal, but did not admit to wrongdoing regarding his alleged involvement.

Lee Kun-Hee resigned as chairman of Samsung Electronics before the 2008 conviction. But he received a presidential pardon in 2009 and returned to Samsung’s management in 2010.

“As South Korea’s most successful entrepreneur, (Lee Kun-Hee) received a dazzling spotlight, but he had many vicissitudes full of grace and disgrace,” the ruling Democratic Party said in a statement. “We hope a ‘new Samsung’ will be realized at an early date as Vice Chairman Lee Jae-yong promised.”

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Job losses to come in wake of Cenovus-Husky transaction, but scale unknown – Calgary Herald

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Article content continued

Business Council of Alberta president Adam Legge acknowledged likely job losses.

“No one likes to see any further job losses than what this province has already been experiencing, and that’s the likely, unfortunate outcome of these kinds of mergers,” he said. “(It will be felt) through everything from real estate to job losses.”

Cenovus said Sunday they had yet to make any decisions on their office space.

In past Alberta oil and gas mergers, including the 2009 deal between Petro-Canada and Suncor, sublease space was added to the market as companies aimed to cut redundancies. The same could happen here, speculated Greg Kwong, the Calgary managing director for real-estate brokerage company CBRE.

“The public can focus on the fact that (Cenovus) is doing this to create efficiencies and come out a stronger, merged company,” Kwong said. “We’re mostly worried that this is a trend we’re going to see more of, maybe not to this magnitude, but with all companies struggling in this environment they’re going to look for efficiencies.”

Legge praised the merger from a business standpoint, saying it should make Cenovus more resilient and diverse and give the company “a new lease on life.”

“This is great news for Cenovus. It expands their footprint, gets them into some of the downstream retail market, which it sounds like they’ve been looking at for quite some time,” he said. “It’s probably a sign of more to come in the sense that as companies look to thrive in a new landscape, the reality is they’ll need to survive through scale.”

jherring@postmedia.com

Twitter: @jasonfherring

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Husky Energy Bought Out By Rival Cenovus – VOCM

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Husky Energy is being swallowed up by rival Cenovus Energy Inc. in an all-stock deal valued at $23.6 billion, the companies announced early Sunday.

The statement said both companies’ boards of directors have approved the transaction that’s expected to close in the first quarter of next year, and has everything to do with the downturn in the industry as companies seek strategies for survival amid COVID-19.

The Calgary-based companies said the combined company will be the third largest Canadian oil and natural gas producer, based on total company production.

The announcement comes as Husky, like most petroleum producers, has been re-evaluating its investments across the board.

It’s not clear yet how the deal will affect Husky’s operations in Newfoundland and Labrador, which includes the idled West White Rose extension project and the SeaRose FPSO.

The company had already laid off dozens of workers in the province earlier this month.

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