Rogers Communications Inc. plans to buy back its publicly-traded wireless division, the company announced Tuesday.
Rogers wants to buy all the outstanding Class B restricted voting shares of Rogers Wireless Communications Inc. by way of a share swap.
Holders of Rogers Wireless shares would get 1.1 Class B shares of Rogers Communications (RCI.B) for each share of Rogers Wireless Class B share (RCM.B).
Based on the average 5-day closing price for both shares, Rogers say the offer would be worth $27.14 for each Rogers Wireless share, a 24 per cent premium.
Rogers Wireless Class B shares have a 52-week trading range of $16.53 to $55.
Rogers Communications Class B shares fell $1.05 to $23.31 Tuesday. Rogers Wireless Class B shares rose $4.95 to close at $26.70.
"We believe that this proposal represents a significant opportunity for RWCI shareholders", Rogers Communications chief executive Ted Rogers said in a release.
"RWCI shareholders will be able to continue to participate through Rogers Communications in RWCI's wireless operations and in the other Rogers companies. RWCI shareholders will also benefit from the increased liquidity in Rogers Communications Class B non-voting shares," Rogers said.
Yorkton Securities analyst John Grandy told Newsworld Business News said Rogers made the move because its wireless stock was cheap. Grandy said the market never really appreciated the wireless end of the business. "They believe they can do a lot with their wireless subsidiary, (but) the public's become skeptical, so they're saying if you don't want to come on the ride with us, we'll go our own direction and buy you out at what we think is a fair price."
The deal will require approval by a majority of the votes cast by Rogers Wireless minority shareholders, excluding the shares owned by Rogers Communications and its telecom partners AT&T Wireless and British Telecommunications.
Rogers Wireless Inc (a subsidiary of Rogers Wireless Communications Inc) operates under the Rogers AT&T Wireless brand. With 2.5 million wireless voice subscribers, it is the country's largest wireless company.