However, a consultation paper published by the Federal Reserve at the end of October has changed those expectations.

To us, this is completely aligned with the government’s long-standing wireless policy,” he wrote.Ĭanada’s Competition Bureau can take credit for keeping Shaw’s wireless business out of Rogers’s hands and forcing the Quebecor deal, Casey said.NEW YORK, Dec 4 (IFR) - America’s largest banks face an unsettling wait for the Federal Reserve to clarify a quirk in its interpretation of new global capital requirements that could potentially disqualify billions of dollars of senior unsecured debt.īecause US banks tend to issue through their holding companies, expectations had been that their senior bonds would meet the Financial Stability Board’s new subordination rules and qualify as loss-absorbing. “Quebecor is positioned to be a more competitive and more sustainable fourth wireless player than Shaw proved to be. It would also be getting the assets at a reasonable price, Casey said. It meets ownership requirements, has an operational track record in the business and enough balance sheet capacity to fund the purchase,” the analyst wrote.īy combining its wireless business with Shaw’s, Quebecor would have more than 3 million wireless subscribers across Canada’s four most populous provinces. “In our view, Quebecor represents the best solution available to satisfy the government’s industrial policy. The arrangement is “as good as it gets” for regulators and a federal government that wants to maintain a policy of having a fourth wireless competitor to challenge Rogers, BCE and Telus, according to Casey. To defuse the antitrust complaint, Rogers and Shaw agreed to sell most of Shaw’s wireless business to Montreal-based Quebecor Inc. Shaw shares have been moving higher, closing Monday at $35.10 - though still far short of the $40.50-per-share takeover bid. Casey argued that they should be able to win approval, despite all the delays and drama. The question is whether Rogers and Shaw can get their deal across the finish line. It has given them time to improve their 5G wireless and fixed-line networks to compete with Rogers, and their shares have outperformed since the Shaw acquisition was announced, Casey said in a report to investors.īCE and Telus “are focused on their core business and are not distracted by the regulatory challenges incurred to date by the cable companies,” Casey wrote. and Telus Corp., BMO Capital Markets analyst Tim Casey said. The delay is “disproportionately favorable” to rivals BCE Inc. It’s possible it won’t close until early 2023, if it closes at all - causing Rogers to ask holders of M&A bonds on Monday if they’ll agree to relax the terms.

The country’s antitrust regulator is trying to block the transaction, forcing the companies to extend the deadline. The situation has handed a huge advantage to its two biggest rivals, according to an industry analyst.Ĭanada’s largest wireless and cable firm agreed in March 2021 to a $20 billion (US$15.4 billion) deal to buy Shaw Communications Inc. is still waiting to see if it can win regulatory approval for a takeover of a smaller Canadian cable company, 17 months after it was first announced.

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