© Reuters. FILE PHOTO: Ethernet cables are seen in entrance of Rogers and Shaw Communications logos on this illustration taken, July 8, 2022. REUTERS/Dado Ruvic/Illustrations/File Photo
By Maiya Keidan and Divya Rajagopal
TORONTO (Reuters) – As Rogers (NYSE:) Communications’ long-delayed takeover of Shaw Communications (NYSE:) Inc nears its ultimate hurdle, bankers, legal professionals and shareholder advisors are getting ready to lastly pocket a C$100 million-plus ($75 million) charge from the bitterly contested deal.
And in a uncommon twist, the legal professionals are anticipated to pocket extra of the whole charges than the bankers, who usually profit essentially the most from outsized transactions, say sources. The deal is among the many greatest charge occasions in Canadian M&A historical past, and a supply aware of the scenario advised Reuters it will land banks concerned with 5% to 10% of their annual funding banking charges.
The C$20 billion deal, which is able to create Canada’s No. 2 telecoms operator, has handed all authorized hurdles after the Competition Tribunal objected on issues that included the merger would elevate wi-fi charges in Canada, already the best on this planet.
After battling for 2 years within the courts, the antitrust company determined to take its objections no additional legally and the merger now awaits ultimate nod from Minister of innovation, science and trade Francois-Philippe Champagne.
Rogers and Shaw estimated in April 2021 that the transaction would value C$100 million in complete charges, however some bankers and legal professionals now count on the payout to be increased because of the prolonged courtroom battle. Rogers declined to offer revised figures.
While legislation corporations typically negotiate fastened charges on transactions, market individuals mentioned such offers could be unlikely on transactions that confronted the quantity of authorized uncertainty of Rogers-Shaw. Back when the deal was launched, it was not identified that Rogers would face a greater than two-year battle for regulatory approval, racking up lawyer charges, who’re paid by the hour.
“Due to the lengthy approval process, the legal teams are likely to take the majority of these fees, which is not typical,” mentioned Derek Van der Plaat, a managing director at BDO Canada, M&A and Capital Markets.
The Rogers-Shaw deal is predicted to be the tenth-largest deal in Canadian historical past since 1995, in response to knowledge from Dealogic.
Law corporations Lax O’Sullivan Lisus Gottlieb represented Rogers, whereas Davies Ward Phillips & Vineberg and Wachtell are legal professionals for Shaw.
FREEDOM SALE
Law corporations Goodmans and Torys suggested Rogers and its controlling shareholder, whereas Davies Ward Phillips and Vineberg and Wachtell, Lipton Rosen and Katz represented Shaw. Burnet, Duckworth and Palmer is an unbiased authorized advisor to a particular committee of unbiased administrators of Shaw.
None of the legislation corporations responded to Reuters queries on the authorized charge.
Rogers retained BofA Securities and Barclays (LON:) as monetary advisors whereas Shaw was suggested by TD Securities and CIBC World Markets Inc for its particular committee.
A spokesperson for Barclays declined to remark and TD, CIBC and BofA didn’t reply to requests for remark.
While fewer charge transparency laws in Canada make knowledge more durable to return by, one other high 10 Canadian deal was EnCana Corp’s $22.4 billion spin out of its oil sands operations into Cenovus Energy (NYSE:) Inc in 2009, which fetched $265 million on a before-tax foundation in complete charges, paperwork filed with the U.S. regulator confirmed.
Rogers agreed to promote Shaw’s cellular unit Freedom Mobile to Quebecor Inc as a concession after the competitors bureau blocked the unique deal, which created one other charge stream. Bennett Jones represented Quebecor on the Competition Tribunal.
Rogers and Shaw on Friday prolonged the closing deadline for the fourth time to March 31.
($1 = 1.3329 Canadian {dollars})
