Caisse de dépôt Trims Cogeco Stake in $229-Million Share Sale
Quebec's pension fund manager, Caisse de dépôt et placement du Québec, has executed a significant divestment from Cogeco Communications Inc., selling approximately $229 million worth of subordinate shares in what the institution describes as a routine portfolio rebalancing. The transaction represents nearly 11 percent of Cogeco's issued and outstanding subordinate shares, yet the Caisse will maintain its position as the largest shareholder of this class of stock.
Transaction Details and Market Reaction
The Montréal-based investor disclosed that the shares were sold at $67.45 each, though the identity of the buyer or buyers remains undisclosed. Following the announcement, Cogeco Communications shares experienced notable volatility, dropping as much as 7.2 percent during Tuesday's trading session before partially recovering to close at $67.50, representing a 5.8 percent decline from previous levels.
Cogeco Communications provides comprehensive telecommunications services including internet, mobile, television, and home phone solutions to approximately 1.6 million residential and business customers across Canada and the United States. The company recently expanded into Canada's competitive wireless market in July, entering a segment dominated by major players like Rogers Communications Inc., BCE Inc.'s Bell Canada, and Telus Corp.
Longstanding Investment Relationship
The Caisse has maintained an investment position in Cogeco for over a decade, participating in several of the company's significant transactions throughout this period. Kim Thomassin, executive vice-president and head of Québec at the Caisse, emphasized in a release that the institution "continues to firmly believe" in Cogeco's potential and growth trajectory.
"Our participation in past transactions underscores the confidence we have in the company and the direction it is taking," Thomassin stated. She further explained that proceeds from the share sale will be strategically reinvested in Québec businesses to support their development and expansion initiatives.
Corporate Structure and Historical Context
Cogeco Communications operates under a dual-class share structure, with control firmly held by the Audet family through Cogeco Inc. This ownership arrangement has significantly influenced past takeover attempts, most notably in 2020 when the family rejected an unsolicited $10.3-billion offer from Altice USA Inc. That proposal included a side arrangement where Rogers would acquire Cogeco's Canadian assets for $4.9 billion, marking the second instance where Rogers was denied expansion into Quebec's telecommunications market.
The Caisse's historical involvement with Cogeco includes:
- A $50-million loan provided in 2013
- A US$315-million contribution toward the MetroCast acquisition in 2017
- Participation in a $350-million share purchase in 2023
This latest transaction represents another chapter in the ongoing relationship between Quebec's largest institutional investor and one of the province's significant telecommunications providers.
