BCE also took a run at Shaw

BCE also bid for Shaw Communications, but lost out to fellow Canadian operator Rogers Communications when BCE declined to amend the deal in a way that addressed regulatory issues raised by Shaw.

BCE, formerly known as Bell Canada Enterprises, confirmed to The Canadian Press that it was "Party A," as described in a management information circular published by Shaw earlier this month.

Per the timetable outlined by BNN Bloomberg, Rogers CEO Joe Natale expressed interest in taking over Shaw on July 20, 2020, with BCE CEO Mirko Bibic expressing the same on January 6, 2021. Then, in February 2021, the Shaw Family Living Trust, which controls the voting shares in Shaw, told both CEOs it was open to offers.

Shaw received a preliminary offer of C$35 ($28.19) per share from Rogers, but that was beaten later that day by a BCE offer of C$37 ($29.80) per share. Rogers raised its bid to C$40.50 ($32.62) on February 22, an offer matched by BCE on February 27, and that remains the standing offer for Shaw.

Shaw ultimate went with the Rogers bid, valued at about C$26 billion ($20.8 billion), over "regulatory issues" it saw with BCE's bid. Those issues, BNN Bloomberg said, stemmed from a "hell or high water clause" that shifts the regulatory risk onto the buyer. That risk could extend to an upcoming auction of 3.5GHz spectrum that potentially could force a winner to divest spectrum won at the auction. Shaw's insistence on the clause ultimately "sunk the process" for BCE, the report added.

Shaw, which owns Freedom Mobile and ended its fiscal Q2 with about 2 million mobile subs, will not bid in the June auction of 3.5GHz spectrum as Shaw proceeds with the merger with Rogers.

While Rogers and Shaw run cable operations that do not overlap, the deal is drawing scrutiny over its potential impact on the competitiveness of Canada's mobile market and the government's desire to have a fourth major mobile player there.

Shaw's Freedom Mobile is currently in that fourth spot behind Rogers, Bell Mobility and Telus Mobility. Notably, Cogeco Communications, which turned down M&A overtures by Altice USA and Rogers, is trying to break into Canada's mobile market under a proposed Hybrid Mobile Network Operator framework that, it claims, will be particularly beneficial to Canada's underserved regions.

According to BNN Bloomberg, there's the possibility that Rogers could be forced to divest spectrum it might acquire in the 3.5GHz auction. Meanwhile, Rogers and Shaw have stressed that the ability of the combined companies to generate scale around 5G technology and services is central to the deal's rationale.

A special meeting of Shaw Class A and B shareholders for the Rogers proposal is slated to be held virtually on May 20 at noon ET.

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— Jeff Baumgartner, Senior Editor, Light Reading