Rogers Communications Inc. is considering the sale of assets such as baseballB次元官网网址檚 Toronto Blue Jays and its stake in a smaller cable and media company to free up capital for its main communications businesses.
The media giantB次元官网网址檚 chief financial officer Tony Staffieri said Tuesday at an industry conference that the company is looking for ways to B次元官网网址渟urface valueB次元官网网址� from the Blue Jays B次元官网网址� which he said is a B次元官网网址渧ery valuable asset for us that we donB次元官网网址檛 get full credit for.B次元官网网址�
He didnB次元官网网址檛 discuss who might buy the team, or if a deal would include the Rogers Centre, or what they would be worth.
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B次元官网网址淭o be clear, there isnB次元官网网址檛 anything imminent that we are about to announce, but weB次元官网网址檙e certainly looking at the alternatives. Again, would like to get the content without necessarily having the capital tied up on our balance sheet,B次元官网网址� Staffieri said.
Aravinda Galappatthige, an analyst who covers Rogers for Canaccord Genuity, writes that the issue of assets sales has been raised before but StaffieriB次元官网网址檚 comments are the most explicit to date.
He estimates that the Blue Jays would be worth about $3.20 per share of Rogers, based on an estimated value of $1.65 billion for the team.
But Galappatthige notes that Rogers has other non-core assets including a 37.5 per cent interest in Maple Leaf Sports and Entertainment, which owns the Toronto Maple Leafs hockey team and Toronto Raptors basketball team, and the Rogers Centre B次元官网网址� worth $200 million to $400 million.
In total, he estimates Rogers has non-core assets that could be worth close to $5 billion or $9.70 per Rogers share.
B次元官网网址淗owever, we highlight that while asset sales are being considered at a high level, we do not believe there any imminent deals in place at this time,B次元官网网址� Galappatthige writes.
Staffieri said the company is currently going through its budgeting process for 2018 and the focus will be on revenue growth and better margins at its wireless and cable divisions.
Staffieri made the comments during an onstage interview at the UBS Global Media and Communications conference in New York, according to transcripts of the event provided by Thomson Reuters.
Rogers (TSX:RCI.B) has previously indicated it is exploring ways to get more value from its portfolio of assets, including the Jays, but StaffieriB次元官网网址檚 comments in New York were more specific.
He said the company still wants rights to sports programming B次元官网网址� which is core to the companyB次元官网网址檚 media business B次元官网网址� but doesnB次元官网网址檛 need to own a team to have that, pointing to the companyB次元官网网址檚 12-year deal with the National Hockey League.
B次元官网网址淩elative to our overall asset portfolio, media is small,B次元官网网址� Staffieri said.
But he said sports content continues to have B次元官网网址渉ealthyB次元官网网址� margins and can complement the Rogers wireless and cable operations as well.
B次元官网网址淥ur focus in media will continue to be on the sports side of it. So donB次元官网网址檛 expect any type of expansion on the media side, other than continue to monetize the sports assets that we have,B次元官网网址� Staffieri said.
As for the companyB次元官网网址檚 investment in Montreal-based Cogeco (TSX:CGO) and Cogeco Communications Inc. (TSX:CCA), a smaller cable and media company based in Montreal, StaffieriB次元官网网址檚 said thereB次元官网网址檚 B次元官网网址減robably better useB次元官网网址� for that capital.
B次元官网网址淭here were some strategic benefits that we had hoped for with Cogeco and those seem to be further and further away,B次元官网网址� Staffieri told the UBS conference.
Galappatthige said RogersB次元官网网址� share in the two Cogecos would be worth about $2.98 per share, for about $1.53 billion.
B次元官网网址淲hile we would expect an orderly sell-down in its Cogeco holdings, this could put pressure on Cogeco Inc.B次元官网网址檚 and Cogeco CommunicationsB次元官网网址� share prices and serve to remove any takeout premium currently imbedded in their stock prices,B次元官网网址� he concluded.
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