The battle over control of Canada’s largest telecom company will hit B.C. courts today, as the head of the family trust that helms Rogers Communications Inc. (TSX: RCI.B) plans to file a petition after being ousted from its board last week.
Lawyers for Edward Rogers, the son of late company founder Ted Rogers, have indicated they will file in B.C. Supreme Court today over the status of Rogers Communications’ board. Rogers, who sparked this dispute in his wish to remove CEO Joe Natale, cited his role as the head of the Rogers family trust giving him the power to resolve board issues through a written resolution (and not a shareholders’ meeting) – due to the fact Rogers Communications is incorporated in B.C.
As such, when Edward Rogers was voted out by Rogers’ board last week, he followed on Sunday with an announcement that he replaced five directors on Rogers’s board – and that he himself was reappointed as board chair by the remaining directors. His position has been openly challenged by the five directors who were supposedly removed, as well as Edward Rogers’ mother, Loretta Rogers, and his two sisters – all of whom are on the board.
One sister, Martha Rogers (who is also chair of the Rogers Foundation), has been vocal on Twitter about the entire affair.
“When did stopping an attempted coup get redefined as a family feud?” Martha Rogers wrote on Twitter on Sunday. “If a non-family member pulled the coup, what would you call it then?”
Martha Rogers added that her brother’s bid to remain as Rogers Communications chair “ should be taken as seriously as if he appointed himself the King of England.”
Media reports say Edward Rogers' lawyers, Vancouver-based Ken McEwan of McEwan Cooper Dennis LLP, indicated that the trust chair has already been contacted by the Ontario Securities Commission over the state of confusion over who controls Rogers Communications at the moment - and the attorneys suggest Rogers Communications should resolve the issue "quickly" in its best interest.
Since trading at TSX resumed Monday morning, Rogers Communications’ b-class shares fell from $60 a share to $ 56.86 overnight and is trading, as of Tuesday at 10:30 a.m. Vancouver time, at $56.03. That marks the stock’s lowest price point since February.
With more than 20,000 employees across the country and total assets reaching almost $40 billion, the company is the largest telecommunications company in Canada – and the uncertainty facing the board (and who ultimately controls the company) is sending shockwaves through the entire Canadian telecom sector.
The battle for control of Rogers Communications by top members of the Rogers family also puts the $26-billion acquisition of Shaw Communications - announced in March - into uncertain territory. As of Tuesday morning, Rogers Communications' website has not reflected the moves by Edward Rogers on its board members page, with Natale and other directors removed by the trust chair still listed as member of the company's board.