Rogers-Shaw’s lawyers could win a bigger chunk of the $100 million plus fees jackpot

TORONTO, Feb 20 (Reuters) – As Rogers Communications (RCIb.TO)’s long-delayed acquisition of Shaw Communications Inc (SJRb.TO) nears its final hurdle, bankers, lawyers and shareholder advisors are preparing to finally hit 100 million CAD-plus ($75 million) fee from the hotly contested deal.

And in a rare twist, lawyers are expected to rake in more of the total fees than bankers, who typically benefit most from outsized transactions, sources say. The deal is among the biggest fee events in Canadian M&A history, and a source familiar with the situation told Reuters that the banks involved would end up with 5% to 10% of their annual investment banking fees.

The $20 billion deal, which will create Canada’s second-largest telecoms operator, has cleared all legal hurdles after the competition court overturned concerns that the merger would increase wireless tariffs in Canada, which are already the highest in the world.

After two years of fighting in court, the antitrust authorities have decided not to pursue their objections legally and the merger is now awaiting the final nod of Minister for Innovation, Science and Industry Francois-Philippe Champagne.

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Rogers and Shaw estimated in April 2021 that the transaction would total CA$100 million, but some bankers and lawyers now expect the payout to be higher due to the protracted court battle. Rogers declined to provide revised numbers.

While law firms sometimes negotiate fixed fees for transactions, market participants said such deals were unlikely in deals faced with Rogers-Shaw’s legal uncertainty. Little was known when the deal went through that Rogers would face a more than two-year regulatory clearance battle that would involve legal fees paid by the hour.

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“Due to the lengthy approval process, the legal teams will likely absorb the majority of these fees, which is not typical,” said Derek Van der Plaat, managing director at BDO Canada, M&A and Capital Markets.

According to data from Dealogic, the Rogers-Shaw deal is expected to be the 10th largest deal in Canadian history since 1995.

Law firms Lax O’Sullivan Lisus Gottlieb represented Rogers, while Davies Ward Phillips & Vineberg and Wachtell are attorneys for Shaw.


The law firms of Goodmans and Torys advised Rogers and his controlling shareholder, while Davies represented Ward Phillips and Vineberg, as well as Wachtell, Lipton Rosen and Katz Shaw. Burnet, Duckworth and Palmer is an independent counsel to a select committee of independent directors of Shaw.

Neither law firm responded to Reuters inquiries about the attorney’s fee.

Rogers retained BofA Securities and Barclays as financial advisers, while Shaw received advice from TD Securities (TD.TO) and CIBC World Markets Inc (CM.TO) on its special committee.

A Barclays spokesman declined to comment, and TD, CIBC and BofA did not respond to requests for comment.

While fewer regulations on fee transparency in Canada make it more difficult to obtain data, another top 10 deal in Canada was EnCana Corp’s $22.4 billion spin-off of its oil sands operation into Cenovus Energy Inc (CVE.TO) in the year 2009, which previously brought in $265 million on a tax basis in total fees, documents filed with US regulators showed.

Rogers agreed to sell Shaw’s mobile unit Freedom Mobile in concession to Quebecor Inc (QBRb.TO) after the competition regulator blocked the original deal, leading to another stream of fees. Bennett Jones represented Quebecor before the competition tribunal.

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Rogers and Shaw on Friday extended the closure period to March 31 for the fourth time.

($1 = 1.3329 Canadian Dollars)

Reporting by Maiya Keidan and Divya Rajagopal Editing by Denny Thomas and Josie Kao

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