Canada's Rogers, Shaw Swap Assets

Includes plan for $225 M dark-fiber network

March 23, 2000

3 Min Read

TORONTO---ROGERS COMMUNICATIONS INC. ("Rogers") (Toronto:RCI.A and RCI.B; NYSE: RG) and SHAW COMMUNICATIONS INC. ("Shaw") (Toronto: SJRb, NYSE: SJR) today announced a wide-ranging series of agreements pursuantto which they have agreed to the following major swap of cable assets andcreation of strategic Internet alliances.
2. Cogeco and Canadian Satellite Communications Inc. Interest Shaw has agreed to sell its current position in Cogeco Cable and Cogeco Inc., (approximately 4.5 million shares) to Rogers at $44 per share. These positions represent approximately 9.1% and 9.6% respectively of the outstanding equity of Cogeco Cable and Cogeco Inc. In exchange, Rogers has agreed to sell its current position in Canadian Satellite Communications Inc. (approximately 4 million shares) to Shaw at $23.50 per share. 3. Merge @Home Canada and Excite Canada Shaw and Rogers have agreed to merge the operations of @Home Canada and Excite Canada (a 50/50 partnership between Excite@Home and Rogers Media) into a single national broadband and narrowband portal. The ownership of the combined entity will be Rogers 51%, Shaw 22.5% and Excite@Home 22.5%. Cogeco and Moffat Communications Ltd. will also be invited to become partners in the combined entity. The new venture Excite@Canada will have an initial funding of $50 million and will be Canada's premier broadband portal available to over 500,000 high-speed customers.

4. Rogers participation in 360networks deal and new Internet Backbone Company As part of a strategy of building a national Internet backbone company, Shaw announced earlier this week a transaction with 360networks (formerly Worldwide Fiber Inc.) that would see Shaw invest US$100 million in 360networks, acquire a national dark fiber network for $225 million, and commit to purchase approximately $25 million of OC-48 capacity over a 3 to 4 year period. Rogers has agreed to invest $125 million in the new Internet backbone company and receive a 49% interest in the new company. Shaw and Rogers will commit all of their Internet backbone traffic to this new company. Rogers will also have the right to purchase US$25 million of Shaw's US$100 million investment, at cost, in 360networks.

Commenting on the transaction, Ted Rogers, President and CEO of Rogers,said, "These transactions will continue our clustering strategy in Central andEastern Canada. When combined with our proposed merger with Videotron, thiswill create a super-cluster of approximately 3.5 million customers in Ontarioand Quebec all interconnected with fibre. We are also looking forward toserving our approximately 200,000 new customers in the Province of NewBrunswick."

Jim Shaw, President and CEO of Shaw said, "With this swap, we become themost clustered and interconnected cable company in Western Canada whilemaintaining a critical mass of approximately 1.86 million subscribers. In ourview, Vancouver is a key urban centre in Canada with good growth potential andan improving economy."

Claude Chagnon, President and CEO of Le Groupe Vidéotron added, "We aredelighted with this initiative. This transaction makes the Rogers -- Vidéotronmerger even more attractive in creating North America's most clustered cableoperation and adds extra value for the Vidéotron shareholders in its mergerwith Rogers."

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