A Canadian telecomm giant is locked in a real life season of Succession
Hours after the board of Rogers Communications Inc. removed Edward Rogers as chairman in a boardroom battle, the cable scion vowed to win back control with a proposal to fire five directors who voted to strip him of his title.
The deposed chairman of Canada’s largest cable and wireless firm said Thursday that he planned to use his position as head of a family trust to get rid of new Chairman John MacDonald and four other directors, confirming an earlier Bloomberg News story.
Edward Rogers, who’s still a director, said he had “lost confidence in the board of RCI as currently constituted.”
The latest development is a dramatic escalation of a power struggle inside one of Canada’s biggest public companies, which is in the midst of a $16 billion takeover bid for rival Shaw Communications Inc. Although Rogers has said the deal is on track to close next year, Shaw shares have dropped for eight straight days on the deepening turmoil at Rogers and are nearly 12% below the takeover price.
The hostilities within the Rogers clan reached the boiling point in September when Edward Rogers tried to oust Chief Executive Officer Joe Natale. His plan had been to install Chief Financial Officer Tony Staffieri in the top job and replace much of the executive team.
But the effort was defeated by a majority of the board — including his sisters and his mother, Loretta Rogers — and Staffieri was shown the door on Sept. 29.
After that, the board sought to impose constraints on Edward Rogers’ authority, creating a committee to set the rules by which he can interact with Natale and other senior executives. That committee included three people — MacDonald, director John Clappison and Melinda Rogers-Hixon, Edward’s sister.
To regain his grip on the company, he has recruited five new candidates for the board, including Toronto real estate executive Michael Cooper, financier Jack Cockwell, former Rogers executive Jan Innes, broadcast executive Ivan Fecan and John Kerr.
Bringing in five allies would tilt the balance. With longtime executives Phil Lind and Alan Horn on his side, Edward Rogers would have eight votes on the 14-person board. Both Lind and Horn said in an emailed statement that they support him.
The battle came to a head in the past 48 hours. On Wednesday, Rogers director Bonnie Brooks sent a letter by email to John Tory, a Rogers family adviser who’s also the mayor of Toronto, according to a person familiar with the events.
The letter, sent on behalf of the company’s independent directors, warned that Edward Rogers’s “scheming” against management was putting the company “at great risk.” The directors said upheaval in the boardroom could affect the company’s credit rating at a time when it’s preparing to borrow billions of dollars to pay for the Shaw deal, which still needs regulatory approval.
“The chair wants to run the company, believes he does run the company, and no CEO or management team can operate effectively under these conditions,” the letter said.
Edward Rogers still holds one significant card, however. He remains the chair of the Rogers Control Trust — the family entity that controls about 97% of the voting shares at Rogers Communications.
That position gives him broad authority to vote the family’s shares in the public company. Thursday night’s statement made it clear he intends to use it by submitting a shareholder resolution to put Cooper, Cockwell, Innes, Fecan and Kerr on the board in place of directors MacDonald, Clappison, Brooks, former Ontario premier David Peterson and Cineplex Inc. CEO Ellis Jacob.
The resolution will be signed and delivered to Rogers Communications on Friday, Edward Rogers said in the statement.
But the provisions of the Control Trust also allow a 10-member advisory committee to change the chair if at least seven members vote in favor, according to the securities filings of Rogers Communications.
The Control Trust committee includes at least three family members who are known to have opposed his plan to dump Natale: sisters Melinda Rogers-Hixon and Martha Rogers and his mother.
“This has been a challenging time for the corporation and I want to reaffirm on behalf of the majority of the Board our support for and total confidence in the management team and CEO of Rogers Communications,” MacDonald said in a statement announcing his promotion to chairman.
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