With the planned marriage between Rogers and Shaw, regardless of whether this is ultimately good for Canadian consumers, what should investors who hold Shaw stock do? I hold Shaw stock in my taxable brokerage account.
With the announcement this week, Shaw stock jumped more than 40% initially and has settled in a range between $33-$35. Great! However, Rogers is offering Shaw shareholders an all cash deal of $40.50 per share. This is sizeable premium to the the Shaw stock price at the close of market on Friday last week which was in the low $20 range. So do you hold or sell?
The interesting question mark in all of this is why Shaw isn’t trading at or close to $40.50 per share. I suspect this has to do with uncertainty. Will federal telecomm regulators and politicians allow this happy marriage to go forward? Will a possible federal election disrupt the marriage before it can take place sometime in 2022 presumably?
There probably is no right or wrong answer here to buy or hold. Either way, Shaw shareholders are looking at a potential win-win situation. So what did I decide to do?
While I am a buy and hold type of guy, I decided to take some profit off the table, particularly given the uncertainty that exists around a deal this size given federal regulatory oversight and the political desire to see greater (not less) competition in the telecomm space in Canada.
I sold about 20% of my Shaw stock and added to my position in XAW.TO, an ETF that is ex-Canada (does not invest in Canada) to decrease my home country bias in Canada.
If you are a Shaw shareholder, what are you doing? Let me know below.