MTS Acquires Allstream

WINNIPEG -- Manitoba Telecom Services Inc. (MTS), (TSX: MBT) has agreed to acquire all of the Class A and Class B shares of Allstream, (TSX: ALR.A, ALR.B; NASDAQ: ALLSA, ALLSB) in a transaction valued at $1.7 billion. This combines the strengths of North America's most profitable communications provider with Canada's largest and most profitable alternative communication solutions provider.

The proposed transaction has been structured to benefit both companies' shareholders, allowing each to participate in the future opportunity of the expanded company. Under the terms of the arrangement agreement MTS will acquire all of the outstanding shares of Allstream at an offering price per Allstream share of $23.00 in cash plus 1.0909 MTS shares. The offer equates to a price of $81.12 per Allstream share, based on the closing price per MTS share on March 17, 2004. The offer represents a premium of approximately 19% for Allstream shareholders over the average closing price of Allstream shares on the TSX and NASDAQ on March 17, 2004.

"Since going public in 1997, we have created and delivered significant and enduring value for our shareholders," said Bill Fraser, President & CEO of MTS. "We have succeeded by focusing on our core competencies and prudently allocating our capital resources to deliver services to our customers. We're delighted to now be extending our capabilities and expertise to the national stage with Allstream, and we look forward to the opportunity for profitable growth and value creation this next step in our evolution represents."

John McLennan, Vice Chairman and Chief Executive Officer of Allstream, said, "This is a complementary fit that makes strategic, financial and business sense. It provides our shareholders with value now and with continuing upside potential going forward. It creates a financially strong company with blue chip clients in Canada and the United States, and with service offerings in all segments of the industry. It provides the platform to participate in a bigger way in the telecommunications business. And it strengthens competition in Canada by creating a strong player in our industry and a more attractive national alternative for customers."

Allstream Corp.