Why Shaw Communications Jumped More Than 7% Today (and Rogers Wasn't Far Behind)
Shares of Canadian telco Shaw Communications (NYSE: SJR) ended Wednesday's trading session up 7.5% in response to favorable comments from Canada's Minister of Innovation, Science and Industry Francois-Philippe Champagne. While far from a full-blown approval of the deal, Champagne's statement released late Tuesday details the divestitures that will need to be made for Rogers Communications (NYSE: RCI) to move forward with its intended acquisition of Shaw. Rogers shares also rallied on the implication of the statement, to the tune of 6%.
The story began in March of last year, when Canada's cable, phone, broadband, and wireless outfit Rogers announced it had reached an acquisition agreement with Shaw Communications valuing the latter company at $26 billion.Doubts regarding the permissibility of the deal surfaced immediately, and lingered even after this past August's agreement to sell Shaw's Freedom Mobile to Quebecor (OTC: QBCR.F) in order to steer clear of an anti-competitive impasse.
Champagne's official statement, however, lays out a clear path for the merger to move forward. The Minister of Innovation, Science and Industry only adds that Quebecor must agree to hold the wireless licenses in question for at least 10 more years, and that the wireless telecom outfit is expected to offer lower prices to customers in Ontario, Alberta, and British Columbia. Provided these conditions are met, Champagne's office appears willing to green-light the deal.
Source Fool.com
