Financial heavyweights in Toronto are urging telecommunications giant Rogers to divest of its $1 billion stake in Quebec-based Cogeco, the Globe and Mail reported on Monday.
• Read also: Cogeco posts higher earnings for the first quarter of 2023
• Read also: Rogers buys Shaw for $26 billion
“Rogers could monetize assets like its interests in Cogeco […] and its sports and media investments,” Fitch said in a statement released last week.
Fitch and two other rating agencies, DBRS Morningstar and S&P Global Ratings, recently downgraded Rogers’ credit rating after closing its more than $20 billion acquisition of Alberta-based Shaw Communications.
Bay Street investment bankers are currently presenting Rogers with various scenarios for possible deals with Cogeco, the Globe reported. In one of them, Cogeco would sell its Ontario assets, which include cable networks located in the Kingston, Oakville, Burlington and Hamilton areas.
Rogers does not want to sell
In a recent interview with the Toronto daily, Rogers CEO Tony Staffieri ruled out any asset sales, saying the company would fund the purchase of Shaw by cutting costs and increasing revenue.
The founder of the Toronto group, Ted Rogers, accumulated shares of Cogeco for several years in the hope of one day getting his hands on the Montreal company.
Bay Street recently pointed out to Rogers that by approving the deal with Shaw, Innovation Minister Francois-Philippe Champagne closed the door to further consolidation in the telecommunications industry.
Recall that in 2020, Altice USA and Rogers had offered $ 11.1 billion to acquire Cogeco, an offer that the Audet family, which controls the Quebec company, had rejected out of hand.
“If Rogers wishes to sell its shares of Cogeco, Cogeco could definitely play a role in this transaction,” commented a spokesman for the company, Youann Blouin, on Monday.