Shaw shares fall over failed antitrust agency talks on Rogers deal

By Divya Rajagopal

TORONTO (Reuters) - Shares in Shaw Communications Inc fell by 6% on Friday as doubt crept in about the fate of Rogers Communications Inc's C$20 billion ($14.7 billion) bid for Shaw after the companies failed to reach a settlement with Canada's competition bureau.

Late on Thursday Rogers-Shaw and Quebecor Inc

The competition bureau said in a statement that it disagrees with that assessment, except for the fact that a negotiated settlement had not been reached.

"Looking at the share price of Shaw, it appears that the market is giving 50-50 chance for the deal to close," said Matthew Dolgin, a Equity Analyst with Morningstar. "The deal is more likely to get approved than not, but we have no idea what the decision will be," Dolgin added.

Rogers launched its bid for Shaw in March 2021, which the antitrust bureau blocked on grounds it would lower competition in a market that already has amongst the highest wireless bills in the world.

The dispute now goes to Canada's competition tribunal on Nov. 7 that could last three weeks, as parties bring forward several witnesses in their defense to a public hearing.

Rogers shares fell by 2% on Friday.

Rogers offered to sell Shaw's Freedom Mobile business to Quebecor Inc to overcome market concentration concerns, but the bureau said that was not enough to approve the deal.

This week, Canada's industry minister François-Philippe Champagne released terms to consider the sale of Freedom Mobile, which the market interpreted as a sign the government was preparing to clear Rogers' original bid for Shaw, sparking a rally in the shares.

Champagne has the final say on the deal.

($1 = 1.3594 Canadian dollars)

(Reporting by Divya Rajagopal; Editing by Josie Kao)