Call Net Enterpris (NASDAQ:CNEZF)
Historical Stock Chart
From Jun 2019 to Jun 2024
Rogers Communications Announces Agreement to Acquire Call-Net
Enterprises in all Stock Transaction
Acquisition Jumpstarts Rogers' Local Telephony Entry and Adds Scale to Rogers
Business Solutions;
TORONTO, May 11 /PRNewswire-FirstCall/ -- Rogers Communications Inc. ("RCI" or
"Rogers") and Call-Net Enterprises Inc. ("Call-Net") today jointly announced
that they have entered into a definitive agreement under which RCI will acquire
100% of Call-Net in a share for share transaction under a plan of arrangement.
Under the terms of the agreement, Call-Net Common and Class B shareholders will
receive a fixed exchange ratio of one RCI Class B Non-voting share for each
4.25 outstanding shares of Call-Net, representing a fully diluted equity value
of approximately $330 million. In total, it is expected that upon closing of
the transaction approximately 9.0 million RCI Class B Non-voting shares will be
issued representing approximately 3.2% of the pro forma shares outstanding.
Based upon the May 10, 2005 closing price of the RCI Class B Non-voting shares,
the transaction values Call-Net at approximately $8.71 per share. At March 31,
2005, Call-Net had senior secured notes due 2008 of $269.8 million outstanding
and cash and short-term investments of $79.6 million.
"This acquisition will significantly jumpstart and expand our ability to
provide customers with a full suite of service solutions that deliver the
simplicity, quality and value they want in one package, on one bill, from one
provider," said Ted Rogers, President and CEO of Rogers Communications Inc.
"This positions us immediately to offer primary line telephone service across
our residential and business bases of wireless and cable customers. It also
provides a substantial additional base of customers to cross-sell our portfolio
of communications and entertainment products and a skilled and knowledgeable
employee group with strengths in telephony sales and marketing. As Rogers'
cable telephony service is deployed on a market by market basis, we will be
able to migrate Call-Net customers in our Rogers Cable territory to our
advanced digital cable telephony platform when advantageous."
"This is a terrific day for Call-Net customers, shareholders, employees, and
for Canadian telecom in general," said Bill Linton, President and CEO of
Call-Net. "We share a common heritage with Rogers as a catalyst in bringing
competition to the Canadian communications markets. By joining our business
with one of the foremost Canadian names in communications, entertainment and
information services, Call-Net customers will have a greatly enhanced selection
of advanced services to choose from in their homes and businesses and the
ability to enjoy the convenience of complete multi-product bundles from a
single provider. The combination of Rogers' innovative offerings and high
quality wireless and cable networks will bring tremendous additional choice and
value to our customers."
"This transaction offers an opportunity to acquire a significant customer base
and telecom assets that together provide network and operating cost synergies
and sales opportunities, which makes the transaction attractive economically as
well as strategically," added Ted Rogers. "This will complement our deployment
of an advanced broadband IP multimedia network to support digital
voice-over-cable telephony and other new voice and data services across the
Rogers Cable service areas and expand the base of customers that will benefit
from them."
Call-Net, through its Sprint Canada subsidiary and with approximately 1,800
employees, provides home phone and local business service, IP data, long
distance and wireless services to approximately 600,000 consumers and business
customers across Canada, the majority of which are concentrated in areas served
by Rogers Cable. Call-Net owns a 14,000 route kilometre North American
transcontinental fibre optic broadband network that spans across Canada and
connects all major cities and into main U.S. voice and data network access and
peering points. Call-Net also has more than 150 central office co-location
points in all of Canada's largest markets as well as options to acquire
significant CLEC assets, including extensive local fibre in eastern Canada,
most of which are within Rogers Cable's serving areas. Call-Net's wireless
services are offered to its customers, alone and in bundles with other voice
services, through a wholesale agreement with Rogers' Fido division.
Rogers anticipates that it will realize cost savings from the transaction,
including reduced payments to incumbent and other telecom providers. The
reduction in costs currently incurred by Sprint Canada, Rogers Wireless and
Rogers Cable include the areas of local and long haul interconnection, the
rental of local loops and transport, Internet and other data transport costs,
and the costs associated with the transport of local and long haul wireless
traffic.
The boards of directors of Rogers and Call-Net have approved the transaction,
with the members of the Call-Net Board having agreed that the transaction is
fair to their shareholders and that they will recommend that the Call-Net
shareholders approve the transaction at a Call-Net shareholder meeting expected
to be held before June 30, 2005.
BMO Nesbitt Burns is acting as financial advisor to Call-Net on this
transaction and has provided Call-Net's Board of Directors with a fairness
opinion that the consideration to be received under the Plan of Arrangement is
fair, from a financial point of view, to the shareholders of Call-Net. Scotia
Capital is acting as financial advisor to Rogers on this transaction.
Subject to certain customary conditions, including among others, regulatory
approvals and acceptance by Call-Net shareholders representing at least
two-thirds of the votes cast in respect of the Plan of Arrangement, this
transaction is expected to close during the third quarter of 2005. The
transaction is expected to be accounted for as a purchase and it is anticipated
that the share-for-share exchange will be structured as tax-free to eligible
Canadian shareholders. Call-Net has agreed not to solicit or take certain other
actions with respect to any competing proposal, and in addition has agreed to
pay Rogers a termination fee of $10 million under specified conditions.
A proxy circular relating to the transaction is expected to be sent to
Call-Net's shareholders prior to the end of May 2005. Investors are urged to
read the proxy circular regarding the transaction when it becomes available, as
it will contain important information.
The proxy circular and the arrangement agreement will be filed in Canada on
SEDAR and in the U.S. with the U.S. Securities and Exchange Commission on the
Commission's website. Investors and security holders may obtain free copies of
the these documents (when they are available) on the SEDAR website at
http://www.sedar.com/ and on the SEC's website at http://www.sec.gov/. The
documents may also be obtained directly from Rogers by directing a request to
or from Call-Net by directing a request to , as applicable.
Holders of Call-Net Common shares and Class B Non-Voting shares are reminded
that (i) each Common share may, at the option of the holder, be exchanged at
any time for one Class B Non-Voting share and (ii) each Class B Non-Voting
share may, at the option of the holder by providing a declaration of Canadian
residency to Call-Net's transfer agent, be exchanged at any time for one voting
Common share.
Cautionary Statement Regarding Forward Looking Information:
This news release includes certain forward looking statements that involve
risks and uncertainties. We caution that actual future events will be affected
by a number of factors, many of which are beyond our control, and therefore may
vary substantially from what we currently foresee. These forward-looking
statements include, among others, statements with respect to our objectives,
and strategies to achieve those objectives, as well as statements with respect
to our beliefs, plans, expectations, anticipations, estimates or intentions and
are based on current expectations. We caution that all forward-looking
information is inherently uncertain and actual results may differ materially
from the assumptions, estimates or expectations reflected or contained in the
forward-looking information, and that actual future performance will be
affected by a number of factors, many of which are beyond our control,
including but not limited to the ability of the companies to close the
transaction and integrate the acquired operations, economic conditions,
technological change, regulatory change and competitive factors. We are under
no obligation to (and expressly disclaim any such obligation to) update or
alter any forward looking statements whether as a result of new information,
future events or otherwise. Important additional information identifying risks
and uncertainties is contained in our most recent annual and interim reports
and forms filed with the applicable Canadian securities regulatory authorities
and the U.S. Securities and Exchange Commission.
About the Companies:
Call-Net Enterprises Inc. (TSX: FON, FON.NV.B), primarily through its wholly
owned subsidiary Sprint Canada Inc., is a leading Canadian integrated
communications solutions provider of home phone, wireless, long distance and IP
services to households, and local, long distance, toll free, enhanced voice,
data and IP services to businesses across Canada. Call-Net, headquartered in
Toronto, owns and operates an extensive national fibre network, has over 151
co-locations in five major urban areas including 33 municipalities and
maintains network facilities in the U.S. and the U.K. For more information,
visit http://www.callnet.ca/ and http://www.sprint.ca/.
Rogers Communications Inc. (TSX: RCI; NYSE: RG) is a diversified Canadian
communications and media company engaged in three primary lines of business.
Rogers Wireless Inc. is Canada's largest wireless voice and data communications
services provider and the country's only carrier operating on the world
standard GSM/GPRS technology platform; Rogers Cable Inc. is Canada's largest
cable television provider offering cable television, high-speed Internet access
and video retailing; and Rogers Media Inc. is Canada's premier collection of
category leading media assets with businesses in radio and television
broadcasting, televised shopping, publishing and sports entertainment. For
further information about the Rogers group of companies, please visit
http://www.rogers.com/.
Conference Call for Investment Community and Media:
A live Webcast of a joint Rogers Communications and Call-Net conference call
with the investment community and media to discuss this announcement will be
broadcast via the Internet at http://www.rogers.com/webcast and/or
http://www.callnet.ca/ beginning at 10:15 a.m. ET on May 11, 2005. A
re-broadcast of this call will be available on the Webcast Archive page of the
Investor Relations section of http://www.rogers.com/ for a period of at least
two weeks following the call.
DATASOURCE: Rogers Communications Inc.; Call-Net Enterprises Inc.
CONTACT: (Investment Community): Rogers Communications: Bruce M. Mann,
(416) 935-3532, ; Eric A. Wright, (416) 935-3550,
; Call-Net Enterprises: Roy Graydon,
(416) 718-6160, ; (Media): Rogers
Communications: Jan L. Innes, (416) 935-3525, ;
Call-Net Enterprises: Karen O'Leary, (416) 718-6445,
;
Archived images on this organization are searchable through CNW Photo Archive
website at http://photos.newswire.ca/. Images are free to accredited members of
the media.