Eva Mathews, Moira Warrenburton
(Reuters) – Rogers Communications Inc’s Third Quarter Earnings Report on Thursday will be overshadowed in a Boardroom Tussle among the founder family members over leadership of Canada’s telecoms company.
Analysts were surprised to see the spat spilling out of the corporate boardroom. This is a rare occurrence in Canada’s corporate world. Rogers seeks to improve its market share in Canada’s telecoms sector by making a C$20billion ($16.2billion) acquisition of Shaw Communications (NYSE:).
Multiple regulators have been scrutinizing the deal, questioning whether or not it will reduce competition.
Rogers has also been dealing with last month’s abrupt departure of Chief Financial officer Tony Staffieri. The sudden resignation of Chief Financial Officer Tony Staffieri, the son Ted Rogers founded, came on the heels of Chairman Edward Rogers unsuccessfully trying to replace Joe Natale. Globe and Mail newspaper reports that Melinda RogersHixon, his sister and deputy chairman, opposed this move.
Scott Rattee (senior vice president, DBRS Morningstar) said that this disagreement was unexpected, pointing out how Rogers credit outlook had been improved by the credit rating agency, partly due to Natale’s leadership.
He said that while board disputes aren’t necessarily bad things, it could impact the company over time if the conflict takes resources away from other problems.
Rogers Communications did not respond to our request for comment.
Investors have also been concerned by Rogers stock’s underperformance. Rogers shares rose more than 3% last year, which is below the 14% gain in Telus Corp and 16% in BCE Inc.
On Tuesday, Chairman Edward Rogers stated that there is “room to improve” the long-term performance of the company following reports that he has held discussions with candidates for replacement board members.
He said, “It is disappointing that the focus on others has diverted from what’s best for the company.”
Rogers serves as chairman of Rogers Control Trust. This trust is the controlling shareholder in Rogers Communications. He also chairs the Rogers Blue Jays baseball club and is a member of the board of Rogers Communications. Rogers owns all of Toronto’s pro basketball, soccer, and hockey teams.
Based on the average estimate from nine analysts using Refinitiv data, Toronto-based company should report a 0.4% increase in revenues to C$3.68 trillion from C$3.67 miliarde a Year ago. However, earnings per share will drop to C$1.02 from C$1.08 last year.
Rattee stated that Joe Natale was believed to have stabilized financial indicators in the company. It seemed to us at that time that the overall organization was better off with a steady head at the helm.
($1 = 1.2322 Canadian dollars)
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