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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: Good Day

I am reading the voting information regarding the proposed take over and I am interested in the meaning of "Shareholders (other than the Shaw Family Shareholders) will be entitled to receive, for each Share held, $40.50 in cash, without
interest, less applicable withholdings"; particularly the part "less applicable withholdings". What does this statement mean?

Thank you

Read Answer Asked by Mike on April 28, 2021

Q: When Roger's takeover bid for Shaw first became public, these shares jumped in value. You suggested the following strategy for investors who held them.
1. Sell one third at that time.
2. Sell one third when the spread between the class A and Class B is gone
3. Sell the last third when the tender is made
Well, now the there is virtually no spread between the A and B shares. Would you still advise selling the second third?

Read Answer Asked by Ron on April 26, 2021

Q: hi 5i. I am thinking of selling shaw, to take advantage of the capital gain. I am not confident the deal with rogers will go through? what are your thoughts on the deal going through? my strategy was to sell the shaw, and buy some rogers, or add to my Telus. any advice would be appreciated, as always. hopefully Peter is on the bike again, roads are looking better now. cheers, Chris

Read Answer Asked by chris on March 31, 2021

Q: Hi 5I: How do you think Shaw carry on over the long term if the takeover does not go forward now that there position is stated by the CEO in his takeover announcement that Shaw needed financial help to meet the huge cost of 5G installation in order to to keep up with the much larger media companies. Thank you for your opinion. Regards John

Read Answer Asked by John on March 17, 2021

Q: Retired, dividend-income investor. I am in the process of trimming my way out of Shaw (held in my TFSA) and looking at where to deploy the funds as they become available over time. I know WELL is not the same risk as SJR, but I am considering it.

However I really focus on asset allocation. I see WELL listed as Healthcare as well as Technology. Is it a hybrid? My tracking system has no problem with splitting it up into either or both sectors. As an example TC Energy, as a pipeline, is categorized as both a Utility as well as Energy. I believe it is a Utility, but because it seems to trade more like Energy stocks. I go 50-50.

I could do the same with WELL. What portion of their business is technology? Is any part of their business related to the Telecom sector? If I was forced to pick one sector, I'd go with Healthcare. Your thoughts?

Thanks....Steve

Read Answer Asked by Stephen on March 17, 2021

Q: Hello 5i Team
Referencing the proposed takeover of Shaw Communications by Rogers Communications, I have the following questions:

1 – No mention of the Shaw Communications preferred shares (SJR.PR.A and SJR.PR.B) was made in the news release or presentation. Do you think they will be assumed by Rogers (i.e. similar to Cenovus takeover of Husky) or would Shaw/Rogers redeem the shares at par value at the next redemption date of June 30, 2021?

2 – Rogers will be exchanging 60 % of the SJR.A / SJR.B shares (owned by the Shaw family) into RCI.B shares, however, Rogers will not be extending this exchange to public shareholders of SJR.B. Do you think activist investors could pressure Rogers to modify their offer to allow public shareholders of SJR.B to exchange their shares of SJR.B for RCI.B [given the Shaw family controls the voting rights for Shaw Communications, I don’t see any support from Shaw family for this change otherwise it would have been part of the deal from the outset]?

3 – The exchange ratio of RCI.B to SJR shares will be 0.70. Given the cash offer price of $40.50 for SJR.B shares this would result in an equivalent RCI.B price of $40.50/0.70 = $57.85. Given RCI.B is trading 6 % higher than the conversion price [$61.57 March 15 close], would it make sense to sell my Rogers shares this week, buy additional shares of SJR and then when the transaction closes, re-purchase my desired holding of Rogers shares? I currently hold equal weight amounts of Rogers and Shaw.

4 – Could the regulators (Federal Government) require Rogers to divest its equity holding in Cogeco Communications as a condition of the deal?

Thank you

Read Answer Asked by Stephen on March 16, 2021

Q: In a G&M article it states that the takeover deal requires two-thirds approval of both the Class B (non-voting) shares and Class A (voting ) Shaw shares to complete the deal - how does that work If the Class B shares are (non-voting).
Also, the Shaw family own the majority of Class A shares who already stated they approve the deal. If the Class B shares somehow vote against the deal - does that mean - no deal?

Read Answer Asked by Reg on March 16, 2021

Q: Retired, dividend-income investor. There is no question I will sell Shaw...anytime someone offers me a 70% premium, I'll take the money and run. I'm just wondering about potential risks. It looks like Rogers-Shaw have tried to structure the deal to hopefully assist the regulator to approve it. Closing is quite a way away...mid next year? Plus there is always the risk of no deal.

1. What would you do? Trim some at various levels, hopefully on the way up to $40? Wait to be taken out....for cash?

2. In other "buy out" situations like this, the stock has approached the "offer" price the day of the announcement. Could you please elaborate on an earlier question as to why the B shares are slow to rise to the offer price of $40.50? At time of typing, they are at $33.

Thanks for your help...much appreciated...Steve

Read Answer Asked by Stephen on March 15, 2021

Q: I am the owner of SJR,B shares. The news release essentially says Rogers will pay $40.50/share for BOTH the A class shares and the B class shares, which represents a 70% premium for the B shares.

At the time of typing this question Monday morning, the market has the A shares at $40.35 and the B shares at $32.00.

Shouldn't the B shares be at $40 as well, or am I missing something or is the market confused?

Thanks for your help...Steve

Read Answer Asked by Stephen on March 15, 2021

Q: In a well diversified portfolio, I am considering selling BMO, CU, PHO, REAL, and SJR.B and buying AT, BYD, DOO, DSG and VII. Would you agree with this approach? What would be order to sell and order to buy?

Read Answer Asked by David on February 16, 2021