Cable deal put on hold

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The Independent Online
NEW YORK - A USdollars 2.5bn ( pounds 1.7bn) merger involving two of Canada's largest communications groups has been put on hold because of confusion over a large block of shares held as a takeover defence, writes Larry Black.

Directors of Rogers Communications, the country's largest cable- TV and cell phone operator, voted in principle last Friday to approve a takeover of Maclean Hunter, the owner of big cable properties in eastern Canada and publisher of Maclean's, the country's only news weekly.

But Rogers said it would not proceed with the bid, or put a price on its tender offer, until regulators ruled on the status of a 17 per cent stake in Maclean Hunter held by a wholly owned Maclean subsidiary.

If the stake is judged to be common public shares, Rogers will be obliged to extend its offer to the stake, raising the price by some dollars 447m ( pounds 302m) and creating a huge capital-gains liability for the buyer.