Shaw Communications (TSX:SJR.B,NYSE:SJR) announced yesterday that it is acquiring ENMAX Envision Inc., a subsidiary of Alberta based utility ENMAX, for $225 million. Envision is the owner of one of Calgary’s largest fibre-optic networks for business. Shaw will package this network capability into its Shaw Business division to bolster its existing services package. More details on the acquisition are expected when Shaw reports earnings this coming Friday.
Shaw tends to get shoved to the back burner when this country’s telecom names are discussed. The likes of Telus (TSX:T), Rogers (TSX:RCI.B), and BCE Inc. (TSX:BCE) receive most of the attention due to their national presence. However, Shaw is a tough regional competitor in Canada’s West for all 3 of the national players given the competitive advantage that its cable network/broadband assets provide.
Shaw’s shares have appreciated by approximately 21% over the past 6 months as the bitter price war caused by Telus’ entry onto Shaw’s TV/internet turf appears to have subsided allowing margins to return to more rational levels.
In addition, Shaw’s recent asset swap with Rogers demonstrated a congenial link between the two family-controlled businesses that hasn’t been evident in the past. The widely held “someday it’s going to happen” thesis on Shaw is that Rogers will acquire it. The asset swap was interpreted as a possible prelude to something much bigger. It was at least a sign that the two companies can sit in the same room with each other to work out a deal.
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Fool contributor Iain Butler does not own shares of the companies mentioned in this report at this time. The Motley Fool has no positions in the stocks mentioned above.
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