Rogers, AT&T Wireless Fail to Reach Agreement

Christian Bauer
Rogers, AT&T Wireless Fail to Reach Agreement on Rogers Wireless Stake

Rogers Communications Inc. (RCI) on Thursday (May 20) said it has been unable to reach an agreement, during the 21 day exclusive negotiation period which ended May 19, to acquire AT&T Wireless Communications Inc.'s (AWE) 34.1 perecent stake in Rogers Wireless Communications Inc.

As announced on April 28, and consistent with a 1999 shareholders agreement between RCI, Rogers Wireless and AWE, RCI received notice from AWE that AWE intends to explore options to divest its 48.6 million share ownership interest in Rogers Wireless (as represented by its holding of 27.6 million Class A Multiple Voting shares and 20.9 million Class B Restricted Voting shares of Rogers Wireless that are held by JVII Partnership, a wholly owned subsidiary of AWE). Rogers owns approximately 56 percent of Rogers Wireless and the remaining 10 percent ownership is publicly owned and traded in Canada and the United States.

The highest offer made by RCI during the initial 21 day Right of First Negotiation period was C$31 per share (US$22.50) for AWE's entire 48.6 million share interest in Rogers Wireless. That offer expired Wednesday night (May 19). Rogers Wireless' stock price has traded below the price offered by RCI more than 85 percent of the trading days during the past three years, and the size of AWE's stake in Rogers Wireless represents more than 340 percent of the current public float of Rogers Wireless and in excess of 580 days of average daily trading activity in Rogers Wireless’ stock (based on the past 60 trading days). The price which was offered represented a discount of approximately 6 percent to Rogers Wireless’ average closing price over the previous 10 trading days.

Under the terms of the shareholders’ agreement between RCI, Rogers Wireless and AWE, AWE will have the ability over the next 60 days to attempt to sell its entire Rogers Wireless stake to third parties. On any such sale to third parties, the price per share must be higher than the C$31 offered by RCI during the negotiation period. In addition, in connection with any such sales to third parties, AWE is required to convert its Rogers Wireless Class A Multiple Voting shares into Class B Restricted Voting shares (which would result in an increase in RCI’s ownership of the outstanding Class A Multiple Voting shares of Rogers Wireless from 69.4 percent as of May 20 to 100 percent). Furthermore, AWE may not sell shares representing more than 5 percent (10 percent to certain suppliers to Rogers Wireless) of the outstanding equity shares of Rogers Wireless to any person.

AWE may, pursuant to a registration rights agreement with Rogers Wireless, require Rogers Wireless to qualify the sale of AWE's Rogers Wireless shares by prospectus in Canada or by registration statement in the United States. If AWE exercises its registration rights in connection with an underwritten offering of its Rogers Wireless shares, Rogers Wireless would have a transferable right of first refusal (exercisable for a period of five business days) to purchase AWE's Rogers Wireless shares at the proposed underwritten price. Rogers Wireless would also have a second transferable right of first refusal (exercisable for a period of 24 hours) if the final underwritten price is less than the price offered pursuant to the initial right of first refusal.
Christian Bauer
This would mean for consumers:

Instead of Telus taking over Microcell Fido, Rogers could also have a chance. Rogers would, infact, be a more viable option as both Rogers & Fido operate on GSM 1900 networks. Ability to combine and economize on both.

This is bad for the consumer. Chopping one more of the competition would mean a possible rise in prices and more of a chance of wireless networks to become much less competitive. Fido has the most competitive prices of the big four.
Rogers can have them. my brother was on fido and whew~ what a pain~ The customer service he said did not even speak english so well.
I can't agree with you more Chris. I want to see more competition in this market, not a decrease in competitors! I'd like to see another big player buy Fido who doesn't already run a wireless provider. Maybe Shaw Communications?

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