Rogers Communications Announces Agreement to Acquire Call-Net Enterprises in all Stock Transaction
11 5월 2005 - 11:00PM
PR Newswire (US)
Rogers Communications Announces Agreement to Acquire Call-Net
Enterprises in all Stock Transaction Acquisition Jumpstarts Rogers'
Local Telephony Entry and Adds Scale to Rogers Business Solutions;
TORONTO, May 11 /PRNewswire-FirstCall/ -- Rogers Communications
Inc. ("RCI" or "Rogers") and Call-Net Enterprises Inc. ("Call-Net")
today jointly announced that they have entered into a definitive
agreement under which RCI will acquire 100% of Call-Net in a share
for share transaction under a plan of arrangement. Under the terms
of the agreement, Call-Net Common and Class B shareholders will
receive a fixed exchange ratio of one RCI Class B Non-voting share
for each 4.25 outstanding shares of Call-Net, representing a fully
diluted equity value of approximately $330 million. In total, it is
expected that upon closing of the transaction approximately 9.0
million RCI Class B Non-voting shares will be issued representing
approximately 3.2% of the pro forma shares outstanding. Based upon
the May 10, 2005 closing price of the RCI Class B Non-voting
shares, the transaction values Call-Net at approximately $8.71 per
share. At March 31, 2005, Call-Net had senior secured notes due
2008 of $269.8 million outstanding and cash and short-term
investments of $79.6 million. "This acquisition will significantly
jumpstart and expand our ability to provide customers with a full
suite of service solutions that deliver the simplicity, quality and
value they want in one package, on one bill, from one provider,"
said Ted Rogers, President and CEO of Rogers Communications Inc.
"This positions us immediately to offer primary line telephone
service across our residential and business bases of wireless and
cable customers. It also provides a substantial additional base of
customers to cross-sell our portfolio of communications and
entertainment products and a skilled and knowledgeable employee
group with strengths in telephony sales and marketing. As Rogers'
cable telephony service is deployed on a market by market basis, we
will be able to migrate Call-Net customers in our Rogers Cable
territory to our advanced digital cable telephony platform when
advantageous." "This is a terrific day for Call-Net customers,
shareholders, employees, and for Canadian telecom in general," said
Bill Linton, President and CEO of Call-Net. "We share a common
heritage with Rogers as a catalyst in bringing competition to the
Canadian communications markets. By joining our business with one
of the foremost Canadian names in communications, entertainment and
information services, Call-Net customers will have a greatly
enhanced selection of advanced services to choose from in their
homes and businesses and the ability to enjoy the convenience of
complete multi-product bundles from a single provider. The
combination of Rogers' innovative offerings and high quality
wireless and cable networks will bring tremendous additional choice
and value to our customers." "This transaction offers an
opportunity to acquire a significant customer base and telecom
assets that together provide network and operating cost synergies
and sales opportunities, which makes the transaction attractive
economically as well as strategically," added Ted Rogers. "This
will complement our deployment of an advanced broadband IP
multimedia network to support digital voice-over-cable telephony
and other new voice and data services across the Rogers Cable
service areas and expand the base of customers that will benefit
from them." Call-Net, through its Sprint Canada subsidiary and with
approximately 1,800 employees, provides home phone and local
business service, IP data, long distance and wireless services to
approximately 600,000 consumers and business customers across
Canada, the majority of which are concentrated in areas served by
Rogers Cable. Call-Net owns a 14,000 route kilometre North American
transcontinental fibre optic broadband network that spans across
Canada and connects all major cities and into main U.S. voice and
data network access and peering points. Call-Net also has more than
150 central office co-location points in all of Canada's largest
markets as well as options to acquire significant CLEC assets,
including extensive local fibre in eastern Canada, most of which
are within Rogers Cable's serving areas. Call-Net's wireless
services are offered to its customers, alone and in bundles with
other voice services, through a wholesale agreement with Rogers'
Fido division. Rogers anticipates that it will realize cost savings
from the transaction, including reduced payments to incumbent and
other telecom providers. The reduction in costs currently incurred
by Sprint Canada, Rogers Wireless and Rogers Cable include the
areas of local and long haul interconnection, the rental of local
loops and transport, Internet and other data transport costs, and
the costs associated with the transport of local and long haul
wireless traffic. The boards of directors of Rogers and Call-Net
have approved the transaction, with the members of the Call-Net
Board having agreed that the transaction is fair to their
shareholders and that they will recommend that the Call-Net
shareholders approve the transaction at a Call-Net shareholder
meeting expected to be held before June 30, 2005. BMO Nesbitt Burns
is acting as financial advisor to Call-Net on this transaction and
has provided Call-Net's Board of Directors with a fairness opinion
that the consideration to be received under the Plan of Arrangement
is fair, from a financial point of view, to the shareholders of
Call-Net. Scotia Capital is acting as financial advisor to Rogers
on this transaction. Subject to certain customary conditions,
including among others, regulatory approvals and acceptance by
Call-Net shareholders representing at least two-thirds of the votes
cast in respect of the Plan of Arrangement, this transaction is
expected to close during the third quarter of 2005. The transaction
is expected to be accounted for as a purchase and it is anticipated
that the share-for-share exchange will be structured as tax-free to
eligible Canadian shareholders. Call-Net has agreed not to solicit
or take certain other actions with respect to any competing
proposal, and in addition has agreed to pay Rogers a termination
fee of $10 million under specified conditions. A proxy circular
relating to the transaction is expected to be sent to Call-Net's
shareholders prior to the end of May 2005. Investors are urged to
read the proxy circular regarding the transaction when it becomes
available, as it will contain important information. The proxy
circular and the arrangement agreement will be filed in Canada on
SEDAR and in the U.S. with the U.S. Securities and Exchange
Commission on the Commission's website. Investors and security
holders may obtain free copies of the these documents (when they
are available) on the SEDAR website at http://www.sedar.com/ and on
the SEC's website at http://www.sec.gov/. The documents may also be
obtained directly from Rogers by directing a request to or from
Call-Net by directing a request to , as applicable. Holders of
Call-Net Common shares and Class B Non-Voting shares are reminded
that (i) each Common share may, at the option of the holder, be
exchanged at any time for one Class B Non-Voting share and (ii)
each Class B Non-Voting share may, at the option of the holder by
providing a declaration of Canadian residency to Call-Net's
transfer agent, be exchanged at any time for one voting Common
share. Cautionary Statement Regarding Forward Looking Information:
This news release includes certain forward looking statements that
involve risks and uncertainties. We caution that actual future
events will be affected by a number of factors, many of which are
beyond our control, and therefore may vary substantially from what
we currently foresee. These forward-looking statements include,
among others, statements with respect to our objectives, and
strategies to achieve those objectives, as well as statements with
respect to our beliefs, plans, expectations, anticipations,
estimates or intentions and are based on current expectations. We
caution that all forward-looking information is inherently
uncertain and actual results may differ materially from the
assumptions, estimates or expectations reflected or contained in
the forward-looking information, and that actual future performance
will be affected by a number of factors, many of which are beyond
our control, including but not limited to the ability of the
companies to close the transaction and integrate the acquired
operations, economic conditions, technological change, regulatory
change and competitive factors. We are under no obligation to (and
expressly disclaim any such obligation to) update or alter any
forward looking statements whether as a result of new information,
future events or otherwise. Important additional information
identifying risks and uncertainties is contained in our most recent
annual and interim reports and forms filed with the applicable
Canadian securities regulatory authorities and the U.S. Securities
and Exchange Commission. About the Companies: Call-Net Enterprises
Inc. (TSX: FON, FON.NV.B), primarily through its wholly owned
subsidiary Sprint Canada Inc., is a leading Canadian integrated
communications solutions provider of home phone, wireless, long
distance and IP services to households, and local, long distance,
toll free, enhanced voice, data and IP services to businesses
across Canada. Call-Net, headquartered in Toronto, owns and
operates an extensive national fibre network, has over 151
co-locations in five major urban areas including 33 municipalities
and maintains network facilities in the U.S. and the U.K. For more
information, visit http://www.callnet.ca/ and
http://www.sprint.ca/. Rogers Communications Inc. (TSX: RCI; NYSE:
RG) is a diversified Canadian communications and media company
engaged in three primary lines of business. Rogers Wireless Inc. is
Canada's largest wireless voice and data communications services
provider and the country's only carrier operating on the world
standard GSM/GPRS technology platform; Rogers Cable Inc. is
Canada's largest cable television provider offering cable
television, high-speed Internet access and video retailing; and
Rogers Media Inc. is Canada's premier collection of category
leading media assets with businesses in radio and television
broadcasting, televised shopping, publishing and sports
entertainment. For further information about the Rogers group of
companies, please visit http://www.rogers.com/. Conference Call for
Investment Community and Media: A live Webcast of a joint Rogers
Communications and Call-Net conference call with the investment
community and media to discuss this announcement will be broadcast
via the Internet at http://www.rogers.com/webcast and/or
http://www.callnet.ca/ beginning at 10:15 a.m. ET on May 11, 2005.
A re-broadcast of this call will be available on the Webcast
Archive page of the Investor Relations section of
http://www.rogers.com/ for a period of at least two weeks following
the call. DATASOURCE: Rogers Communications Inc.; Call-Net
Enterprises Inc. CONTACT: (Investment Community): Rogers
Communications: Bruce M. Mann, (416) 935-3532, ; Eric A. Wright,
(416) 935-3550, ; Call-Net Enterprises: Roy Graydon, (416)
718-6160, ; (Media): Rogers Communications: Jan L. Innes, (416)
935-3525, ; Call-Net Enterprises: Karen O'Leary, (416) 718-6445, ;
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