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Cogeco's Top Investor Rejects Revised Offer From Altice USA

Cogeco's top investor, Gestion Audem, has rejected Altice USA Inc's C$11.1 billion or $8.43 billion revised buyout offer for Cogeco.

Gestion Audem is a company that is controlled by members of the Audet family and holds 69% of all voting rights of Cogeco Inc. (CGO.TO), which in turn controls 82.9% of all voting rights of Cogeco Communications Inc.(CCA.TO).

"As we did on September 2nd, 2020, following the announcement of their first unsolicited proposal, members of the Audet family unanimously reject this further proposal. ... we repeat today that this is not a negotiating strategy, but a definitive refusal. We are not interested in selling our shares," said Louis Audet, President of Gestion Audem.

Altice USA has offered C$11.1 billion or US$8.4 billion to buy Cogeco, up from the previously offer of C$10.3 billion or US$7.8 billion that was rejected by the Audet family last month.

Altice USA said that the aggregate all-cash consideration offered for all of the outstanding shares of Cogeco Inc and Cogeco Communications, including those owned by Rogers, is C$11.1 billion. This includes C$5.1 billion or US$3.9 billion to be paid by Altice USA for the U.S. Assets.

The revised offer includes C$900 million or US$682 million to the Audet family for their ownership interests.

Altice USA has also revised its offer to Rogers Communications Inc. (RCI, RCI_A.TO and RCI_B.TO), the largest long-term shareholder of Cogeco, to sell all the Canadian assets of Cogeco for C$5.2 billion.

Upon completion of the overall transaction, Altice USA would own all the U.S. Assets of Cogeco, namely Atlantic Broadband, and Rogers would own the Canadian assets.

Altice USA said it will withdraw its revised offer, If it is unable to arrive at a mutually satisfactory agreement by November 18, 2020.

Altice USA and Rogers anticipate closing the transactions within six to nine months after signing definitive agreements, following receipt of necessary approvals.

Altice USA's share repurchase and net leverage targets for 2020 remain unchanged from the transaction.

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