MONTREAL – Cogeco Cable Inc. (TSX:CCA) has a friendly deal to buy Peer 1 Network Enterprises (TSX:PIX), a Canadian Internet infrastructure provider.
The Montreal-based cable company is offering $3.85 in cash per share — valuing Peer 1’s total equity at about $526 million.
Cogeco’s offer is nearly $1 per share above the Thursday closing price for Peer 1 shares at the Toronto Stock Exchange.
Chief executive Louis Audet says Cogeco’s strategy is to grow in the data centre sector.
The company is Canada’s fourth-largest cable company and part of a group that also has radio and television businesses in the province of Quebec.
It attempted unsuccessfully to expand into Europe several years ago but had to pull out after major losses with an acquisition in Portugal.
Audet says Peer 1 gives Cogeco opportunities for growing its presence in the business segment of the Internet services market.
“Peer 1 is a leading business and technology service company with talented and committed employees and long-term customer relationships,” Audet said in a statement.
“We warmly welcome Peer 1 professionals and believe that our combined businesses will provide new and larger growth opportunities for all our employees and customers.”
Peer 1’s board of directors is supporting Cogeco’s offer, subject to their right to consider and accept superior proposals. Cogeco will have a five-day right to match a superior proposal and, under some circumstances, will receive a $18.5-million termination fee if the deal isn’t completed.