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Caisse de depot et placement du Quebec is selling part of its stake in Cogeco Communications Inc., freeing up approximately $229 million as part of what it called a “periodic portfolio rebalancing.” The block represents nearly 11 per cent of Cogeco’s issued and outstanding subordinate shares, though the pension fund will still remain its biggest shareholder.
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The Montréal-based investor said the shares will be sold at $67.45 each. The announcement on Monday did not disclose the identity of the buyer or buyers. Cogeco Communications provides internet, mobile, television and home phone services to about 1.6 million residential and business customers in Canada and the United States.
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The Caisse has been invested in Cogeco for more than a decade and has taken part in several of the company’s major transactions over that period.
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It “continues to firmly believe” in the company’s potential, Kim Thomassin, executive vice-president and head of Québec, said in a release, adding that participation in past transactions “underscores the confidence we have in the company and the direction it is taking.” She said proceeds from the sale will be reinvested in Québec businesses to support their growth.
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Cogeco entered Canada’s wireless market in July, expanding beyond its traditional cable, internet and television services into a segment that includes Rogers Communications Inc., BCE Inc.’s Bell Canada and Telus Corp.
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Cogeco Communications operates under a dual-class share structure, with control held by the Audet family through Cogeco Inc. That structure has shaped past takeover efforts.
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In 2020, the family said it would not support an unsolicited $10.3-billion offer from Altice USA Inc., which included a side arrangement for Rogers to acquire Cogeco’s Canadian assets for $4.9 billion, according to a company press release. The bid was rejected and marked the second time Rogers had been denied in its effort to expand further into Quebec’s telecom market.
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The Caisse’s earlier involvement with Cogeco includes a $50-million loan in 2013, a US$315-million contribution toward the MetroCast acquisition in 2017 and participation in a $350-million share purchase in 2023.
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Shares of Cogeco fell as much as 7.2 per cent in trading on Tuesday, but retraced some of the losses to close at $67.50, down 5.8 per cent.
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English (US)