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Investors Give Nod To Shaw Communications & Rogers Combination

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Fiber-optic and wireless connectivity provider Shaw Communications (SJR) has received shareholders’ approval for its $26 billion combination with Rogers Communications. Of the total votes cast, 99.8% were in favor of the deal.

The transaction will accelerate 5G rollout in Canada, especially in underserved rural and indigenous communities.

Shaw Communications Executive Chair and CEO, Brad Shaw said, “Shaw’s shareholders overwhelmingly supported the transaction and the high voter turnout, which exceeded 70%, represents a strong endorsement for the combination.”

Shaw added, “We have taken an extraordinary and historic step towards a future with unlimited potential where connectivity and leading 5G technology will enable so much more than we can even imagine today.” (See Shaw Communication stock analysis on TipRanks)

Under the agreement, Rogers exercised its right to require Shaw communications to redeem its issued and outstanding preferred shares as of June 30. A notification from Shaw for this redemption is expected on May 28.

Shaw Communications will be seeking a final order for approval for the business combination from the Alberta Court of Queen’s Bench on May 25. Pending further regulatory approvals and closing conditions, the transaction is expected to close in H1 2022.

Recently, Desjardins analyst Jerome Dubreuil initiated coverage on the stock with a $33.57 price target (12.6% upside potential).

Dubreuil believes the stock’s price has factored in a probable approval for its combination with Rogers Communications. Dubreuil sees the deal going through with limited regulatory risk for the wireline assets and the probability that Rogers will hive off Shaw’s wireless assets.

Consensus among analysts is that Shaw communications is a Moderate Buy based on 4 Buys and 2 Holds. The average analyst price target of $34.72 implies 16.5% upside potential.

Shares have gained about 78.8% over the past year.

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