The ousted chairman of Rogers Communication Inc. says he has been reinstated in the top job by his hand-picked members of the new board — but the company and his family says nothing could be further from the truth.
The bizarre saga of infighting within the Rogers family for control of their eponymous telecom conglomerate continued Sunday evening with Edward Rogers declaring himself once again chairman of the company.
Last week, Rogers was removed as chair of the company after details emerged about a plan he led to oust the company's CEO Joe Natale. His plan was to replace Natale with then-CFO Anthony Staffieri. Natale got word of the attempt when Staffieri reportedly butt-dialled him while discussing the plot with someone else.
Staffieri left the company abruptly after the plot came to light.
At a board meeting, other members of the Rogers board and family, including sisters Melinda and Martha and the family matriarch, Loretta, banded together in a vote to remove Edward as company chair.
While out as chair of the company, he remained as chair of the family trust that has voting control over the company his father, Ted, founded. And he used his seat atop the trust to call a board meeting on Sunday with his hand-picked directors, a meeting at which he says he was reinstated.
Other members of the family reject that version of events.
"Edward's invalid meeting this evening signifies and changes absolutely nothing," Loretta said in a statement to CBC News on Sunday evening.
"Edward unfortunately continues to proceed down a misguided and miscalculated path which leads nowhere productive and puts his own interests ahead of those of Rogers employees, customers and shareholders. He should stop immediately, as his behaviour simply serves to underscore his seemingly wanton disregard for good governance."
WATCH | Edward's mother and sister are trying to stop him:
The family says Edward's move is invalid because under the laws of British Columbia, where Rogers is incorporated, changing board members at a public company must be approved by a full shareholder vote. Edward says that isn't the case, and in a statement on Sunday said he intends "to initiate proceedings in the British Columbia Supreme Court to confirm and implement" the new corporate structure.
In a series of tweets over the weekend, his sister Martha vowed to "spend every penny" to stop her brother.
Rogers shares have lagged since founder's death
Shaw takeover at stake
The bizarre power struggle comes as the company is in the midst of trying to finalize the $26 billion takeover of Shaw Communications Inc.
The investment community has for the most part been trying to avoid the side show and focus on the prospects for the underlying business, but Sunday's theatrics appear to be the straw that broke the camel's back as a number of analysts say the turmoil is hurting the company.
"We are reducing our target price by [about] 10 per cent," Vince Valentini at TD Bank said. "We believe it is necessary to implement a discount on our target [share] price related to this uncertainty."
"The uncertainty of this situation is a near-term negative, in our view, but once this unfortunate board battle distraction is resolved, we believe both cash flow and the share price will increase."
RBC analysts Drew McReynolds and associate Riley Gray also say the messy fight is hurting the company.
"Collateral damage now seems inevitable, and in our view, will only grow the longer a definitive resolution takes," they said in a note to clients on Monday.
They said the company management will be "distracted, if not handicapped" as the boardroom battle goes on.
The company is facing a "suboptimal period of transition" and "a difficult (but not impossible) road back to restoring investor confidence," they said.
Rogers shares lost about five per cent of their value on Monday, the first chance investors in the company had to voice their views on the acrimonious weekend. The company's stock price has lagged that of rivals BCE and Telus ever since founder Ted Rogers died in 2008.
After Sunday's apparently successful board meeting, Valentini thinks it does appear likely that Edward 's succession play will ultimately find success.
"We believe the odds have now increased that Edward Rogers and his supporters will be able to win majority control of the Board at Rogers Communications. Other members of the Control Trust could possibly mount a legal challenge, but we believe the odds now favour a successful manoeuvre by Edward Rogers."