CGECF - Citi sees long odds for Altice USA-Cogeco deal after second rejection
Citi is expecting low odds for Altice USA (ATUS -1.8%) to close a deal for Cogeco (CGECF) and Cogeco Communications (CGEAF -6.5%) after the latter companies' controlling shareholders have rejected a second bid. Altice USA and Rogers Communications (RCI -1.6%) are part of an offer raised yesterday to C$11.1B, whereby Altice USA and Rogers would split the American and Canadian assets respectively. But Gestion Audem, the holding company for the Audet family, says the family "unanimously" rejects the new proposal. "Since this is apparently not registering with Rogers and Altice, we repeat today that this is not a negotiating strategy, but a definitive refusal. We are not interested in selling our shares," says Louis Audet. The market looks skeptical, Citi's Michael Rollins writes, and he estimates "market-implied probability for a deal is about 10%." Citi has a Buy rating on Altice USA.
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Citi sees long odds for Altice USA-Cogeco deal after second rejection