Telus Bids $780M on Microcell

Telus announces takeover bid for all outstanding publicly traded shares and warrants of Microcell

May 17, 2004

2 Min Read

Vancouver, B.C. -- TELUS Corporation (TSX: T, T.A; NYSE: TU) today announced its intention to make all-cash takeover bids (“bid”) to purchase all of the issued and outstanding publicly traded shares (TSX: MT.A, MT.B) and warrants (TSX: MT.WT.A, MT.WT.B) of Microcell Telecommunications Inc. The total equity value of the transaction is approximately Cdn$1.1 billion (approximately equal to US$780 million). The total debt less cash of Microcell as at March 31, 2004 pro-forma for closing of Microcell's rights offering and the exercise of privately held warrants of Microcell is approximately Cdn$54 million.

“TELUS' bid to acquire Microcell is consistent with our strategy to focus on the growth markets of wireless, IP and data and increases the speed at which we can enhance our position, particularly in Quebec and Ontario given the location of Microcell's customer base,” said Darren Entwistle, President and CEO of TELUS. “TELUS' bid is also consistent with the current North American consolidation in the scale-driven wireless business. TELUS has a proven track record of post-acquisition integration. If our bid is successful, this transaction will not only provide an attractive return to Microcell security holders, but also a positive future for Microcell's customers, to whom we look forward to providing our high quality service experience. This transaction would also be a positive development for the future Canadian ownership of the Canadian wireless industry.”

The shares and warrants of Microcell subject to the bid are the class A restricted voting shares (the “Class A Shares”), class B non-voting shares (the “Class B Shares”), Warrants 2005 and Warrants 2008 (collectively, the “Warrants”). The cash offer prices are Cdn$29.00 for each Class A Share, Cdn$29.00 for each Class B Share, Cdn$9.67 for each Warrant 2005 and Cdn$8.89 for each Warrant 2008. This bid does not contain an offer for the Microcell warrants privately held by COM Canada LLC, which based on Microcell's public disclosure become exercisable into Class B Shares as a result of this takeover bid.

The prices offered represent a premium of 38.1% and 36.5% over the closing prices of the Class A Shares and Class B Shares on the Toronto Stock Exchange, respectively, on the last trading day prior to the public announcement of the intended bid. The TELUS bid represents a premium of 31.8% relative to the recently completed Microcell rights offering, which allowed rights holders to acquire additional Class B Shares at a price of Cdn$22.00 per share for exercise at a later date.

“We look forward to offering Microcell clients the unsurpassed national coverage, exceptional client care and leading products and services that have led to TELUS Mobility's rapid growth as a full-service national wireless provider,” said George Cope, President and CEO of TELUS Mobility. “TELUS Mobility has consistently reported one of the lowest subscriber churn rates worldwide, which bodes well for the excellent service experience awaiting Microcell's clients post acquisition.”

Telus Corp.

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