July 21, 2009

Shaw Likes Mountain’s Prospects

Without naming a purchase price, Shaw Communications President Peter Bissonnette confirmed that the planned acquisition of Ontario-based Mountain Cablevision was pricey.

“There was a premium,” Bissonnette said.

Assuming the $220 million (or more) in Canadian currency suggested by Greg O’Brien’s Web site cart.ca is accurate, one figures the deal translates at a minimum into U.S. $198 million, some $4800 per cable television subscriber or $1725 per revenue generating unit (RGU). Mountain has 115,000 RGUs.

The premium is better estimated not by industry record highs—which reached $5700 per sub in 2000—as by the offers that Owen Boris received from other MSOs bidding for the company that he had founded 50 years ago.

Bissonnette confirmed that Rogers Communications was at the head of the line. “In deference to Ted (Rogers), Owen gave him the first crack at it,” he said. (Canadian cable icon Ted Rogers died last December. For more, click here.)

When that didn’t work out, the bidding was opened up to other Canadian MSOs. Bissonnette said a meeting between Shaw execs (including Founder JR Shaw) and Boris gave them “a sense of what (Boris) was looking for.”

Whatever the other MSOs offered, it wasn’t enough. “The Rogers, Cogeco and Eastlink bids were low compared to Shaw’s,” one insider confirmed.

The meeting between Shaw and Boris, however, made clear what a premium would buy, namely: technical prowess, a growth opportunity and corporate compatibility.

“It is fully built, great penetration. It looked like a Shaw system,” Bissonnette said.

As for high performance, Mountain Cablevision has a longstanding solid reputation, having been selected as a CT Top Tier System in 2006. (For more click here.) The future opportunities lie largely in the system’s position within the so-called Golden Horseshow or Triangle that stretches from Niagra Falls around to Hamilton and back to Toronto.

“Any opportunity to get into that Golden Triangle, you’d be remiss if you didn’t take advantage of it,” Bissonnette said.

—Jonathan Tombes