Edward Rogers Says Board Agreed to Drop CEO; Chairman Says It’s Not True
(Bloomberg) -- The board of Rogers Communications Inc. voted 10-1 to let go of Chief Executive Officer Joe Natale and even drafted a press release announcing his departure, but reversed course at a Sept. 26 board meeting, according to court documents filed by Edward Rogers.
Edward’s mother, Loretta Rogers, spoke in favor of a CEO transition, according to an affidavit he filed Tuesday as part of his effort to wrest control of the company. His sister, Martha Rogers, also supported the move, the documents state.
But Loretta Rogers said in an emailed statement that her son’s version of events is “unfortunate” and “untrue” and that she supports Natale as the man to lead the company through its proposed $16 billion takeover of rival Shaw Communications Inc. She said she was shown information that cast Natale’s performance in a poor light, but after conferring with independent directors, she decided to stand by him.
John MacDonald, the man who replaced Edward Rogers as chairman of the company last week, said: “At no time did the majority of the board vote to remove Joe Natale as CEO of Rogers Communications. There are several critical and material items that are categorically false” in Edward Rogers’ affidavit, he said.
Rogers fell 0.4% to C$56.31 on Tuesday after a 5.8% drop on Monday that was spurred by the boardroom chaos.
The documents shed new light on the fractures within the Rogers clan and the sequence of events that triggered the bitter struggle for control at Canada’s largest wireless company. The situation has become so bizarre that two men now claim to be chairman: Edward Rogers and MacDonald.
Edward Rogers is seeking to have a British Columbia court rule that he has the power to appoint the directors he wants unilaterally, without a shareholder meeting. The court will be asked to resolve the dispute, with hearings scheduled for Nov. 1.
Edward Rogers’ court case is the latest chess move in an ongoing power struggle that has pitted him against his mother and sisters Melinda Rogers-Hixon and Martha Rogers. The family has been publicly sparring for weeks.
Edward Rogers said in an affidavit he has been concerned about the company’s performance under Natale for the past two years. He initially raised concerns in September 2019 at a meeting of the family trust, and the matter was discussed three times since, the documents say.
Natale’s departure was to be announced as a retirement, with Chief Financial Officer Tony Staffieri promoted to CEO in early October. Instead, the board reversed the decision and fired Staffieri, who left on Sept. 29.
“This is a business issue. The focus should not be on our family,” Edward Rogers said in an emailed statement late Tuesday. “My objective remains to resolve this matter as quickly as possible.”
After stopping the attempt to dump Natale, Loretta Rogers and her daughters, along with other directors, removed Edward Rogers as chairman last week.
But because Edward is also the chair of the family trust that controls 97% of the voting rights in the company, he has pushed ahead with an effort to replace five independent directors on the 14-person board with his allies.
That new group met Sunday night and issued a statement that the reconstituted board had reappointed him as chairman. Rogers Communications, Loretta Rogers, Melinda Rogers-Hixon and Martha Rogers all say the new board is illegitimate and the previous board remains intact under MacDonald.
The timing couldn’t be worse as the firm pushes forward with the Shaw takeover. The deal has the potential to transform Rogers, bolstering its wireless network in Western Canada and giving it the national heft to compete against larger rival BCE.
Shares of Shaw have fallen well below the takeover price of C$40.50 per share as investors worry the transaction could be delayed or fall apart altogether -- though Shaw has said it remains committed to closing the sale.
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