TORONTO — It’s a messy family boardroom battle fit for binge watching.
It’s son against mother, and sisters against brother. There’s one of the world’s worst accidental phone calls. And the dirty laundry of one of Canada’s richest families has been aired out in court filings and on Twitter (where else?). Hanging in the balance is the multibillion-dollar takeover bid of a rival firm.
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The slugfest over control of Rogers Communications, Canada’s largest wireless carrier, has drawn a host of comparisons: a Shakespearean drama full of twists and betrayals, a clan-vs.-clan tangle worthy of CBS soap “The Young and the Restless,” and infighting and intrigue akin to the HBO series “Succession.”
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Martha Rogers, one of the protagonists of this real-life Canadian saga, has likened it instead to another HBO offering: The bloody fantasy series “Game of Thrones,” with its tyrant kings, wedding massacres and fire-breathing dragons.
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On Friday, the Supreme Court of British Columbia is expected to weigh in on the long-simmering clash that recently reached a boil, riveting a nation where the Rogers name and its red-and-white logo is ubiquitous in some places and such acrimonious family backstabbing in the business world rarely plays out so publicly.
At issue is whether Edward Rogers, son of the firm’s late founder, Ted Rogers, can replace several of the board’s directors with his own picks by written resolution and without a shareholder meeting. Other board members — including his mother, Loretta Rogers, and sisters Martha Rogers and Melinda Rogers-Hixon — say the move breaches the firm’s rules and Ted’s wishes. Two squabbling factions of directors now claim to represent the $24 billion company, which is seeking the takeover of rival Shaw Communications.
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The deal, which is pending regulatory approval, could transform Canada’s telecommunications space and would help Rogers expand its footprint in western Canada. The combined firm would preside over a cable and media empire that also includes sports teams such as the Toronto Blue Jays.
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“It’s highly unusual,” said Kai Li, a finance professor at the University of British Columbia’s Sauder School of Business. “The family is in the middle of a mega acquisition. Typically, it would be the targeted firm that implodes. … You would expect that they would be relatively well behaved.”
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The meltdown among Ted’s heirs burst into public view last month.
It began behind closed doors in September, when Edward sought to shake up the firm’s leadership by concocting a plan to replace Joe Natale, the chief executive of Rogers, with Tony Staffieri, then the firm’s chief financial officer.
In an affidavit, Edward said he had grown displeased with Natale’s performance and harbored doubts about whether he could lead Rogers through a $21 billion takeover of Shaw, which is viewed as critical for the company’s future.
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Natale learned about the plot to oust him by accident, after Staffieri inadvertently dialed his number (a headline in the Globe and Mail, Canada’s national newspaper, described it as a “butt dial”) at an inopportune time: while Staffieri happed to be chit-chatting away about it with someone else.
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Several members of the board, including Edward’s 82-year-old mother and two of his sisters, banded together to block the move and voted to keep Natale at the helm of the firm. Rogers announced Sept. 29 that Staffieri had left the company.
The board then stripped Edward of his title as chairman on Oct. 21 and the company announced a replacement.
Edward responded by declaring that he had unilaterally replaced five of the independent directors of the 14-member board with his own candidates through a written resolution. His new board held a meeting, he said, where it reelected him chairman.
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A statement “on behalf of Rogers Communications Inc.” said the “former” chairman’s move was “invalid.”
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Or, as Martha put it in a tweet: “I see Ed has appointed himself the Chairman. LOL. This should be taken as seriously as if he appointed himself the King of England.” She has taken to Twitter to opine on “Ed’s perpetual tantrums,” the Rogers “Old Guard,” and the wider controversy swirling around the firm and her family.
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The Beaverton, an online Canadian publication similar to the Onion, weighed in with a nod to complaints about sky-high wireless costs in Canada: “Rogers hits customers with ‘entertainment tax’ after wild week of corporate shenanigans.”
Edward claims he has the authority to make changes to the makeup of the board with a stroke of a pen and without a shareholder meeting because he chairs the family trust that controls 97.5 percent of the telecom giant’s class A voting shares. Under the firm’s dual-class share structure, class B shares have no voting rights.
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Edward said in an affidavit that his mother had initially supported firing Natale. She has countered that she reversed herself after she realized she had been given inaccurate information about the chief executive’s performance by her son and his loyalists.
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Edward asked the Supreme Court of British Columbia, where Rogers is incorporated, to legitimize his board.
In the meantime, two groups claim that their board of directors — each with a different chair — is in charge.
“Like in a bad movie, Ed & his Old Guard literally meet in dark boardrooms,” Martha wrote in a tweet. “All men. All white. All old. They think they are masters of the universe instead of thinking about the impact their instability is causing tens of thousands of people. Not this time. #OldGuardDown.”
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Li said the saga puts a harsh light on poor corporate governance in Canada. She said it’s “kind of outrageous” that the class B shareholders have no voice.
Ted started Rogers, which now boasts some 11 million customers, in 1960 when he purchased the radio station CHFI. His father had invented a radio that ran without batteries. Over the decades, Ted would snap up several radio stations, cable channels, magazines and the Toronto Blue Jays, Canada’s sole Major League Baseball club.
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Rogers also holds a stake in Maple Leaf Sports and Entertainment, the entity that owns the Toronto Maple Leafs hockey team, the Toronto Raptors basketball team and the city’s Major League Soccer franchise, Toronto FC. Its name is splashed on several sports arenas across Canada.
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Ted died in 2008. His funeral was attended by several Canadian prime ministers and other titans of business and politics in the country. An obituary in the Globe and Mail described him as “this country’s version of Steve Jobs.” A business school at a Toronto university is named after him.
Speculation about who would succeed Ted swirled long before his death. So far, none of the firm’s chief executives have been family members, but Li said Edward would like to operate as a sort of “shadow CEO.”
When Ted put his son Edward in charge of the family trust, he explained to the Globe and Mail that it was important “to have one person on deck, one person who’s in charge.”
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“I have every confidence in him,” he said in the 2008 interview. “But if I’m wrong … they can make a change to Melinda … or whoever.”
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