Canada's BCE To Purchase Manitoba Telecom ServicesBCE to purchase MTSManitoba Telecom Services (MTS) today announced it has agreed to be bought by BCE which will invest one billion dollars over five years to bring next-generation internet wireless and television products to Manitoba customersManitoba Telecom Services Inc. (MTS) today announced it has entered into a definitive arrangement agreement pursuant to which BCE Inc. (BCE) (TSX, NYSE: BCE) will purchase all of the issued and outstanding common shares of MTS under terms that contain compelling benefits for our shareholders, our customers, our employees and will support long term growth and prosperity in the Province of Manitoba. The transaction is valued at $3.9 billion. The transaction has been unanimously approved by the Board of Directors of each of MTS and BCE and is supported by the management teams of both companies. "This transaction recognizes the intrinsic value of MTS and will deliver immediate and meaningful value to MTS shareholders, while offering strong benefits to MTS customers and employees, and to the Province ofManitoba," said Jay Forbes, President & CEO, MTS. "We are proud of our history and what we have achieved as an independent company. We believe the proposed transaction we are announcing today with BCE will allow MTS to build on our successful past and achieve even more in the future." "BCE looks forward to being part of Manitoba's strong growth prospects, building on the tremendous MTS legacy of technological innovation, customer service and competitive success by delivering the best broadband, wireless, internet and TV services to the people of Manitoba in communities large and small," said George Cope, President & CEO of BCE. "As the headquarters for the Western operations of BCE, Bell MTS will focus on delivering the benefits of new broadband communications infrastructure, ongoing technology development and enhanced community investment to Manitobans everywhere." BCE has offered to purchase all of the issued and outstanding common shares of MTS for $40.00 per share, representing a premium of 23.2% based on the volume weighted average closing price on the Toronto Stock Exchange of MTS' common shares for the last twenty trading days, and values MTS at approximately 10.1 times 2016 estimated EBITDA (less deferred wireless costs) based on the latest consensus estimates, and 9.5 times including the present value of tax assets. MTS shareholders will be able to elect to receive $40.00 per share in cash or 0.6756 of a BCE common share for each MTS common share, subject to proration, such that the aggregate consideration to be paid to MTS shareholders will be 45% in cash and 55% in BCE common shares. The share consideration is based on BCE's twenty trading day volume weighted average price of$59.21 on the Toronto Stock Exchange. In connection with the arrangement, the Board of Directors of MTS will not declare any further dividends on MTS' common shares other than being permitted to declare a second-quarter 2016 dividend in May to be paid in July. Compelling Benefits for Manitoba
"This transaction would benefit all Manitoba telecommunications customers," said Forbes. "A successful national operator like Bell has the scale, reach and financial strength to offer better access to advanced services for more Manitoba consumers and businesses, and to compete and invest in the province's infrastructure in the long term." BCE values the talent and skills of MTS people and has committed to making Winnipeg its headquarters forWestern Canada, which with the addition of the MTS team will have a total of approximately 6,900 employees. MTS' data centre is expected to join BCE's network of 27 large data centres and gain access to the largest broadband fibre network in Canada. BCE will maintain a strong and important position within the local community, ensuring that naming rights for the home of the Winnipeg Jets and other community sponsorships are maintained or extended. Additionally, BCE will introduce a new Bell Let's Talk Manitoba fund focused on mental health support for aboriginal communities chaired by Manitoban Clara Hughes, the national spokesperson for Bell Let's Talk. Structure, Timing and Approvals of Proposed Transaction The Board of Directors of MTS unanimously recommends that MTS shareholders vote in favour of the plan of arrangement, which is expected to be subject to a special meeting of shareholders held in late June of 2016. The Board of Directors of MTS has obtained a fairness opinion from each of Barclays Capital Canada Inc., CIBC World Markets Inc. and TD Securities Inc. that, as of May 1, 2016, and subject to the assumptions, limitations and qualifications on which such opinions are based, the consideration to be received by MTS shareholders is fair, from a financial point of view, to such shareholders. The arrangement agreement between MTS and BCE provides for, among other things, a non-solicitation covenant on the part of MTS, subject to customary "fiduciary out" provisions that entitle MTS to consider and accept an acquisition proposal that constitutes or may reasonably be expected to constitute a superior proposal and a right in favour of BCE to match any superior proposal. If the arrangement agreement is terminated in certain circumstances, including if MTS enters into a definitive agreement with respect to a superior proposal, BCE is entitled to a break-fee payment of $120 million. The transaction also includes a reverse break-fee payment of $120 million payable by BCE in certain circumstances. The transaction is currently expected to close in late 2016 or early 2017. Source: PR Newswire | |
