How an accidental phone answer exposed ‘coup plan’ at Canada’s Rogers Communications -Breaking
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© Reuters. FILE PHOTO – General view of Rogers Building and quarters at Rogers Communications, Toronto, Ontario Canada, October 22nd, 2021. REUTERS/Carlos Osorio/File PhotoBy Sarah Berman
(Reuters) – Joe Natale (NYSE:) Communications Inc) called Tony Staffieri in mid September to talk about a plan to shake up Canada’s largest telecom firm.
Staffieri answered Natale’s phone accidentally.
This left Natale with 21 minutes to listen to Staffieri talk about the massive management reshuffle ex-chairman Edward Rogers had planned, according to an Affidavit from Rogers Chairman John MacDonald.
MacDonald’s affidavit is following an Oct. 26 submission of Edward Rogers to Supreme Court of British Columbia. This was as both factions battle for control of Rogers Communications’ board. The hearing is scheduled for Monday.
Natale called Staffieri shortly after and convened an informal meeting of independent directors to talk about what he heard. Natale stated that Staffieri had become a liability to him and asked for his termination.
Less than two weeks later, Staffieri left the company, even as Rogers was navigating its biggest ever M&A, the C$20 billion ($16.1 billion) bid for smaller rival Shaw Communications (NYSE:).
Edward Rogers was the sole son of Ted Rogers’ late founder Ted Rogers and his departure from Staffieri did not prevent him from continuing to pursue his dreams. The board, which included his mother and two siblings, decided to replace Edward as chairman with MacDonald as lead independent director. Natale was supported by MacDonald.
These details, as well as Edward’s timeline reveal the turmoil at Rogers Communications. They also show the wide-ranging distrust and distrust within the family.
While it is not uncommon for wealthy families and company boards to have differences, such spats are rare in Canada. This has taken analysts and investors by surprise and drawn the regulator’s attention.
Rogers stock shares are also down 2.9%, compared to 17% gains at BCE (NYSE 🙂 Inc, and a 12.6% increase for Telus Corp (NYSE 🙂 Corp during the same period.
S&P Global (NYSE:) Ratings said the distractions could hinder Rogers’ ability to raise capital while also navigating regulatory hurdles before it can complete the Shaw deal.
Edward used his role as chair at the Rogers Control Trust family, which holds most of the voting shares, as a way to form a new company board. He was then recognized as chairman. To legitimize his new board, he petitioned to the Supreme Court of British Columbia (where the company is registered).
Although the sequence of events described in court filings is different, the common thread seems to be Edward’s apparent fall out with Loretta Rogers (the family’s patriarch), as well as his sisters Melinda Rogers and Martha Rogers.
Rogers Communications declined immediate comment from Rogers Communications spokespersons. Edward Rogers’ family members were not able to speak for Rogers Communications.
Edward stated that Natale failed to turn the company around and the board agreed for Natale to be the CEO. Loretta Rogers stated that her initial support for Edward was based upon incorrect and incomplete information. She later changed her mind and supports Natale.
MacDonald claimed that Natale’s family and board had not voted for his termination, instead believing that Natale had “exceeded the goals of his position” as CEO.
($1 = 1.2392 Canadian dollars)
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