Rogers Buys Microcell

Rogers Wireless announces agreement to purchase Microcell Telecommunications for C$1.4 billion

September 20, 2004

3 Min Read

TORONTO, ONTARIO, and MONTREAL -- Rogers Wireless Communications Inc. ("Rogers Wireless"), Rogers Communications Inc. ("RCI") and Microcell Telecommunications Inc. ("Microcell") jointly announced today that Rogers Wireless and Microcell have entered into an agreement under which Rogers Wireless will make an all cash bid for Microcell securities totaling approximately C$1.4B. Rogers Wireless has agreed to purchase Microcell's Class A Restricted Voting shares and Class B Non-Voting shares for C$35.00 per share. As well, Rogers Wireless will offer to purchase the 2005 warrants for C$15.79 and 2008 warrants for C$15.01. Subject to regulatory approvals and Microcell shareholder acceptance, this transaction is expected to close before the end of the year.

The combined businesses will operate Canada's only nationwide GSM/GPRS/EDGE wireless network and will serve over 5.1 million voice and data customers. This transaction also creates a company of measurably increased scale allowing for significant opportunities for operating and capital spending efficiencies.

The members of the Board of Directors of Microcell have agreed that the Rogers Wireless offer is fair to the shareholders of Microcell and in the best interests of their company. The Board of Directors of Microcell has agreed to recommend to its shareholders to support the Rogers Wireless offer. The Board of Directors received opinions from its financial advisors, JP Morgan Securities Inc. and Rothschild that the Rogers Wireless offer is fair, from a financial point of view, to the shareholders of Microcell.

"This transaction will position Rogers to better compete against incumbent telco wireless operators in Canada," said Ted Rogers, President and CEO of RCI. "It also ensures a healthy, competitive marketplace and all of the associated benefits for wireless customers across Canada."

"The combination of Rogers Wireless and Microcell will offer our customers the strength of our common network, operating on the world standard GSM technology, and continued leadership in delivering innovative wireless solutions," said Nadir Mohamed, President and CEO, Rogers Wireless. "The combination will make Rogers Wireless the largest wireless operator in Canada with over 5.1 million voice and data customers across the country and with pro forma network revenues of approximately $3.0 billion."

Microcell's President and CEO, Andre Tremblay stated "We believe that this transaction constitutes an attractive opportunity for our customers and our shareholders alike. It allows for the continuation of the Fido brand in the marketplace, ensures our customers will continue to receive excellent service and offers them the benefit, upon closing, of significantly enhanced wireless coverage across Canada."

Rogers Wireless intends to finance the purchase through cash on hand, drawdown of its C$700 million bank credit facility and through bridge loan of up to C$900 million from RCI. RCI will fund the bridge loan through cash on hand and drawdown of credit facilities at its other subsidiaries.

The Rogers Wireless offer is subject to receipt of certain regulatory approvals and other customary conditions, including a requirement that two-thirds of the shares must be tendered. Under certain circumstances, a fee of $45 million is payable by Microcell to Rogers Wireless, including if a superior proposal is recommended by the Board of Directors of Microcell.

Rogers Wireless Communications Inc.

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