Rogers asks bondholders for help in closing long-delayed deal for Shaw

It is taking far longer to close Rogers Communications Inc.'s $26-billion acquisition of Shaw Communications Inc. than was imagined when the telecom giant was lining up final financing for a deal that now faces a serious challenge from competition authorities

Rogers wants holders of US$9.35 billion of bonds to accept additional fees in exchange for extending their outside redemption date from the end of December to the end of December 2022.

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If committed financing is in place, Rogers and Shaw will be able to extend their agreement for another year.

The financing news could cost Rogers material amounts, according to a note to clients by a telecom analyst.

It will cost Rogers about $520 million if the proposed amendment is approved by a majority of the holders of the special mandatory redemption bonds.

If the deal doesn't close by the end of the year, an additional $255 million will have to be paid in January of next year.

Dubreuil still believes that the combination of Rogers and Shaw would be good for the company's shareholders.

The analyst said that the financing terms were not a bad decision.

He noted that if the bondholders accepted the offer, it would reduce interest-rate risk to Rogers and reduce the pressure to close the transaction this year.

There are signs in the bondholder solicitation that Rogers is still optimistic that it can complete the combination with Shaw.

If Rogers didn't expect the SJR transaction to close, it's unlikely the company would have committed an additional $520 million upfront.

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