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U.S.-listed shares of Rogers drop 3%, while its Canadian shares fell nearly 2%. Shaw shares were also down 1.7% at a near one-month low of C$35.60.
The unprecedented outage on Friday affected nearly every facet of daily life in Canada as access to internet and phone services, both mobile and landline, was cut off. Some callers could not reach emergency services via 911 calls, police across Canada said.
“The incident is likely to introduce incremental regulatory risk to the Shaw transaction,” BMO analyst Tim Casey said, adding it would also raise investor concerns over Rogers’ ability to execute on deal synergies.
Friday’s disruption came two days after Rogers held talks with Canada’s antitrust authority to discuss possible remedies to its blocked takeover of Shaw.
Canada’s competition bureau blocked the deal earlier this year, saying it would hamper competition in a country where telecom rates are some of the world’s highest. The merger still awaits a final verdict.
Rogers’ second outage in 15 months has led consumers and politicians to call on the government to allow more competition in the sector. Rogers, BCE (NYSE:BCE) Inc and Telus (NYSE:TU) Corp control 90% of the Canadian telecommunications market.
Rogers said on Saturday that its services were close to fully operational and narrowed the cause to a network system failure following a maintenance update.
Scotiabank analysts said increased political and regulatory risk is a possibility after the outage but said the oversight needs to balance the risk of future failures against the increased consumer/economic costs in building other parallel networks.
