Despite being removed as chair of the company that bears his name, Edward Rogers is not giving up in his battle for control.
In a press release late Thursday, Edward Rogers says he is seeking to remove five members of the board of Rogers Communications Inc. and replace them with five of his choosing.
In the release, Edward says he “believes that it would be in the best interests of RCI to reconstitute the board.”
The move comes after Edward was removed as chair of the company on Thursday amid a messy battle for control behind the scenes. In September, Edward tried to get rid of CEO Joe Natale and put the company’s chief financial officer, Tony Staffieri, into the top job.
An emergency board meeting was called, a meeting at which three members of the Rogers family — sisters Melinda and Martha, along with their mother, Loretta — banded together to stop Edward’s plan.
Natale reportedly heard of the plan to oust him when Staffieri accidentally pocket-dialled him while discussing the plan with one of the company’s former executives, the Globe and Mail reported Thursday.
Staffieri left the company abruptly within days. But that didn’t stop Edward’s attempts to make changes at the top.
After weeks of behind-the-scenes battles, he was voted out as chair of the board of the company his father, Ted, founded. He was replaced as chair by independent director John MacDonald, who is among the five board members that Edward is trying to remove, along with John Clappison, David Peterson, Bonnie Brooks and Ellis Jacob.
Still on company board
While out as chair, Edward Rogers remains on the company’s board. And his move to replace other members of the board suggests he’s still seeking change at the top.
“This story may not be over,” Prof. Richard Powers with the Rotman School of Management in Toronto told CBC News in an interview on Thursday evening.
While Rogers Communications Inc. is a public company with shares that freely trade on the Toronto Stock Exchange, the family maintains effective control over the company through an entity known as the Rogers Control Trust that has 97 per cent of the company’s A shares, which have 50 times more voting rights than the shares that float on the stock market.
In response to Edward’s move, the company issued a statement Friday saying it was concerned that the trust would seek to make a fundamental change in such an unusual way.
It added that it had not yet received any documentation from Edward Rogers or the trust regarding the board member changes and that it would consult with its counsel if and when that happened.
Glen Rowe, a professor of strategy at the Ivey Business School in London, Ont., says that a messy dispute like this at a company the size of Rogers is rare.
“Normally, when you have a dual structure with the family owning the majority of the voting shares, you don’t see this kind of public family dispute in this type of situation,” he said in an interview. “I’m very surprised that what’s going on within the family has spilled over into the public forum.”
“One of my friends called this a soap opera, and I think that’s a very good … way to describe it.”
Unable to sway family
Powers says he thinks Edward has made a gross miscalculation.
“Edward thought he had more sway than he did, but he certainly wasn’t able to sway his family members. And … the big stick on that board is Loretta,” Powers said, referring to Ted’s widow. “She is … the matriarch of the family and to go ahead with a coup without her support … just questions his judgment.”
Investment analyst Jerome Dubreuil with money manager Desjardins said in a note to clients on Friday that the power struggle is a distraction.
“It appears that the board is doing everything it can to address the situation quickly in order to stabilize management and governance processes long before the acquisition of [Shaw] closes,” he said, referring to the company’s planned $26 billion takeover of Shaw, which faces numerous regulatory hurdles.
“Still, we believe this series of events may very well not be over,” Dubreuil said.