Media, telecom M&A activity bounces back from pandemic lows

M&A deal volume among U.S. and Canadian media and telecommunications companies continued its recovery in March from pandemic lows, rising 38.6% year over year.

S&P Global Market Intelligence counted 112 sector deal announcements with disclosed transaction values in March, compared to 111 in February. By comparison, the sector saw 88 deal announcements in March 2020.

Canadian communications company Rogers Communications Inc.'s planned purchase of Shaw Communications Inc. for $21.30 billion marked the largest sector deal announced in March. S&P Global Ratings credit analyst Aniki Saha-Yannopoulos said the deal will strengthen Rogers' competitive position in Canada, giving the combined company "a national cable footprint that covers almost 60% of Canada with quad-play capability in their market."

However, Saha-Yannopoulos warned that Rogers could face a two-notch downgrade on its current BBB+ long-term credit rating.

The Rogers/Shaw deal is expected to close in the first half of 2022, with Shaw CEO and Executive Chair Brad Shaw, alongside another director to be nominated by the Shaw family, joining the Rogers' board after deal closure and approval.

The second-largest deal was Madison Square Garden Entertainment Corp.'s $2.01 billion agreement to purchase MSG Networks Inc. in an all-stock, fixed exchange ratio transaction. On completion, MSG Networks shareholders will receive 0.172 share of MSG Entertainment class A or class B common stock for each MSG Networks class A or class B share they own.

Newslight LLC's proposal to acquire Tribune Publishing Co. for $829.7 million was No. 3 on the list. Newslight is an entity jointly owned by Choice Hotels International Inc. Chairman Stewart Bainum Jr. and Swiss billionaire Hansjörg Wyss, whose $18.50-per-share offer was considered potentially superior to an earlier acquisition offer from Alden Global Capital LLC. Alden Global affiliates had previously agreed to buy all of the outstanding shares it did not already own in Tribune Publishing for $17.25 per share in cash.