Eva Mathews and Sarah Berman

(Reuters) – Rival factions claim control of Rogers (NYSE) Communications Inc’s board (RCI) on Monday. This comes after a dispute in the family that founded the company erupted, weighing on stock prices and raising questions about the future of a multibillion dollar takeover.

Following Edward Rogers’ unsuccessful attempt to remove Joe Natale, the son of Ted Rogers who founded the company, the dispute erupted. Natale claims he was losing confidence in Natale’s ability to run the combined entity.

Edward was then at odds with his two older sisters and mother, who supported Natale. This resulted him being removed as Rogers’ chairman. Edward responded by using his chair position at Rogers Control Trust (the family owned entity which controls the majority of voting share in the company) to retaliate and formed a new board. He was then recognized as Chairman.

To legitimize his new board, he approached the Supreme Court of British Columbia where the company was founded.

Judges will determine which dueling board is responsible.

Canada is not known for its family disputes, so it has taken investors and analysts by surprise. Analysts have cautioned that distractions can be caused by the drama at Rogers’ boardroom. Shaw reiterated Friday its support of the deal.

Analyst at CFRA Research Keith Snyder said that “Shaw shareholders might get cold feet” and opt to exit the deal. It could pull out of the deal, he said, giving competitors Telus (NYSE) Corp and BCE (NYSE) Inc a chance to offer a bidding for it.

Shaw stock was closed Friday at C$35.64. That’s a discount of Rogers offer price C$40.50. Market players are doubtful about this deal’s viability.

Edward stated in his affidavit that the board had agreed to remove Natale from the CEO role. Loretta Rogers (the family matriarch) said she initially supported Edward based on incorrect information from her son. However, after learning more facts, she changed her mind about supporting Natale.

John MacDonald (who was elected Rogers chairman following Edward’s departure) stated that the board of directors and relatives had not voted against Natale and they instead believed he had “exceeded all his goals” in his affidavit.

Morningstar analyst Matthew Dolgin thinks a resolution is unlikely soon. Rogers stock is currently down 2.9% compared to a 17% rally at BCE and 12.6% increase in Telus.

Dolgin explained that we normally would be less inclined to accept the wishes and actions of an ousted Chairman, but because of the complexity of the family-controlled firm it’s anything but simple.

RCI has a special ownership structure. It is owned by 10 family members, his children and widow as well as several friends from long time. RCI’s Class A voting shares are owned by the trust at 97.5%.

“The oversized influence of the Rogers Control Trust on RCI’s board, combined with recent actions, is inconsistent within our M&G framework, in particular for a large public company such as RCI,” S&P Global (NYSE:) Ratings said in a statement last week as it downgraded its assessment of Rogers’ management and governance (M&G) to “fair” from “satisfactory.”

($1 = 1.2392 Canadian dollars)