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Great White North merger bid begins

Rogers Communications has finally put its bid for Maclean Hunter on the table. On Friday, Rogers topper Ted Rogers announced that the Toronto-based company was willing to pay $ C17 ($ 12.65) a share or $ C2.8 billion ($ 2.08 billion) to buy out Maclean Hunter. Rogers also said that the deal would allow Maclean Hunter shareholders to share in the proceeds of the planned sale of Maclean Hunter’s U.S. cable assets, if Rogers can sell them for more than $ C1.5 billion ($ 1.12 billion).

The two Toronto-based multimedia companies, which have extensive cable holdings, spent most of last week in a war of words after Rogers went public with its plans to try to merge Rogers and Maclean Hunter. The Rogers bid hit a snag in a dispute over a block of Maclean Hunter shares held by a Maclean Hunter-controlled subsidiary, but that problem had been ironed out by week’s end.

Rogers is Canada’s largest cable-system operator, with 1.7 million subscribers, and it would increase its market share to 33% with the acquisition of Maclean Hunter’s cable holdings. Maclean Hunter owns cable systems in Ontario and in several U.S. states, and has extensive publishing interests.

There was no immediate reaction from Maclean Hunter topper Ronald Osborne to the Rogers bid, but Osborne has said the company will be exploring all possible avenues. Maclean Hunter shareholders have until March 15 to respond to the offer.

There has been some speculation that a bidding war for Maclean Hunter could up the price, but Rogers has indicated that he’s unwilling to pay much more for the company than the offer on the table. Maclean Hunter has a so-called “poison-pill” mechanism in place to hinder hostile takeover bids, and Osborne hasn’t ruled out using that strategy in response to the Rogers offer.

Rogers vice chairman Phil Lind says the two companies have yet to decide whether this is a hostile bid or not, and he says the poison pill is still a problem area.

From the start, Rogers execs have wrapped their bid in the Canadian flag, arguing the country has to start building huge, integrated communications conglomerates to be able to compete with international multimedia giants like Time Warner.

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