- Continues Bell's presence within GLENTEL's national retail
distribution network
- GLENTEL plans to continue offering consumers choice in Canadian
mobile phone brands
- Supports Bell's strategic imperatives to accelerate wireless
and improve customer service
- Bell accelerating wireless in Canada with leading capital investments in
broadband networks and mobile service innovation
- GLENTEL shareholders to receive $26.50 per share in a combination of cash and BCE
shares
- Transaction represents a premium of 121% based on the 10-day
volume weighted trading average share price of GLENTEL on the
TSX
This news release contains forward-looking statements. For a
description of the related risk factors and assumptions please see
the section entitled "Caution Concerning Forward-Looking
Statements" later in this release.
MONTRÉAL and BURNABY,
Nov. 28, 2014 /CNW Telbec/ - BCE Inc.
(TSX, NYSE: BCE; Bell) and GLENTEL Inc. (TSX: GLN), today announced
that they have entered into a definitive agreement whereby BCE will
acquire all of the issued and outstanding shares of GLENTEL, the
Canadian-based multi-carrier mobile products distributor. Valued at
approximately $670 million, the
transaction enhances Bell's strategy to accelerate wireless and
improve customer service in a competitive wireless marketplace,
while providing additional value to GLENTEL shareholders.
"GLENTEL is a remarkable Canadian success story, and over the
past 25 years has been influential in driving the widespread
adoption of mobile services in Canada, the United
States and elsewhere internationally. As our longstanding
partner, the GLENTEL team shares Bell's commitment to wireless
growth and service innovation, and we are proud to welcome them,"
said George Cope, President and CEO
of BCE Inc. and Bell Canada. "GLENTEL's national reach, deep
product knowledge, and great customer service and sales execution
are key to our strategy to accelerate wireless."
"As GLENTEL considered its future opportunities, it was
essential that our partner share in GLENTEL's core values of
Quality, Service and Integrity. Bell, who has been a long time
significant contributor to GLENTEL's success, is that partner. We
are delighted that GLENTEL, together with Bell, will continue to
deliver legendary customer service to its customers, and believe
that this new relationship will provide additional value to our
shareholders and employees," said Tom
Skidmore, GLENTEL President and CEO.
Headquartered in Burnaby, BC,
GLENTEL operates 494 retail locations across Canada offering wireless products and services
from Bell Mobility, Chatr, Fido, Rogers Wireless, SaskTel and
Virgin Mobile, and plans to continue offering products from
multiple carriers following the acquisition. Outside Canada, GLENTEL owns, operates, and franchises
approximately 735 retail locations in the
United States, as well as 147 points of sale in Australia and the
Philippines.
"There are clear growth opportunities ahead in Canadian
wireless. This includes the significantly increased number of
mobile customers with two or three year service contracts who will
be eligible to renew their plans and change carriers over the next
two years, a result of the federal wireless code of conduct
implemented in 2013. Bell is ready to compete for their business,"
said Wade Oosterman, President of
Bell Mobility. "Supporting Bell's commitment to deliver improved
customer service, this transaction secures continued access for
consumers to the convenient, high-quality customer experience
offered by GLENTEL retail brands."
Details of the transaction
Bell will acquire all of
GLENTEL's approximately 22.4 million fully diluted common shares,
for a total consideration for GLENTEL's equity of approximately
$594 million. GLENTEL shareholders
may elect to receive either $26.50 in
cash, or 0.4974 of a common BCE share, for each GLENTEL common
share, representing a premium of 108% based on GLENTEL's closing
share price on the TSX on November 27,
2014 and a 121% premium to the volume weighted trading
average share price on the TSX for the past 10 days. The BCE share
consideration is based on the 10-day volume weighted trading
average share price on the TSX of $53.27.
Including net debt and minority interest of approximately
$78 million, the total enterprise
value of GLENTEL is approximately $670
million. The transaction consideration will consist of a
combination of 50% cash and 50% in BCE common shares. Bell will
fund the cash component with available liquidity and expects to
issue approximately 5.6 million BCE common shares to fund the
equity component. GLENTEL shareholders will be able to elect cash
or share consideration and will be subject to proration should the
total elections for cash or shares exceed the maximum
available.
The Board of Directors of GLENTEL, acting on the unanimous
recommendation of the Special Committee (which consisted solely of
independent directors of GLENTEL), has approved the transaction and
recommends that GLENTEL shareholders vote in favour of it. The
Skidmore family, which owns approximately 37% of the common equity
of GLENTEL, has entered into agreements with Bell supporting the
transaction. Canaccord Genuity Corp., financial advisor to the
Special Committee of the Board of Directors of GLENTEL, provided an
opinion that as of the date of the opinion and subject to the
assumptions and limitations stated therein, the consideration
proposed to be received by GLENTEL shareholders is fair from a
financial point of view.
The agreement between Bell and GLENTEL provides for a
non-solicitation covenant on the part of GLENTEL and a right in
favour of Bell to match any superior proposal. If Bell does not
exercise its right to match, Bell would receive a termination fee
of $33.6 million in the event GLENTEL
supports any superior proposal.
Expected to close by the end of the first quarter of 2015, the
transaction will be effected through a plan of arrangement and is
subject to customary closing conditions, including court,
shareholder and competition approvals. A reverse break fee of
$33.6 million would be payable by
Bell to GLENTEL should the transaction not close for competition
approval reasons. GLENTEL has agreed not to declare or pay
dividends on its shares through to the closing date. GLENTEL
shareholders are expected to vote on the transaction in early
2015.
A proxy circular will be prepared and mailed to GLENTEL
shareholders in the coming weeks providing important information
about the transaction. A material change report will be filed with
the Canadian securities regulatory authorities and will be
available at www.sedar.com.
Canaccord Genuity Corp. acted as exclusive financial advisor to
GLENTEL. Owen Bird Law Corporation acted as legal counsel to
GLENTEL, McCarthy Tétrault LLP acted as legal counsel to the
Special Committee of GLENTEL, and Blake, Cassels & Graydon LLP
in Canada and Sullivan &
Cromwell in the US acted as legal counsel to Bell.
Bell accelerating wireless in Canada
Since 2006, Bell has invested
approximately $7 billion to acquire
new mobile 4G spectrum and build advanced wireless networks in
every region of Canada. As a
result, a re-energized Bell is regaining its leadership position in
Canadian wireless with rapid customer adoption of smartphones and
ongoing fast growth in data services like mobile TV.
Bell is rolling out the best wireless network technology
available, 4G LTE, and now offers Canadians access to the largest
LTE service footprint in the country. Available to 84% of the
population, LTE coverage is growing fast as Bell extends the
broadband service to smaller towns, rural communities and
Canada's North. By the end of
2015, Bell 4G LTE service will cover more than 98% of Canadians –
similar to Bell's existing 4G HSPA+ network. This summer, Bell was
able to increase data speeds up to 45% across its LTE network for
all smartphone users.
Bell's ongoing strategic transformation is built on
industry-leading investment in communications growth services,
including wireless, TV, Internet and media. With over $3 billion in capital investment each year in new
fibre and mobile networks, and more than $575 million in Canadian R&D annually, Bell
invests more in Canadian communications infrastructure and service
innovation than any other communications provider.
About GLENTEL
Based in Burnaby, BC, Canada, GLENTEL (TSX: GLN) is a provider of
innovative and reliable wireless communications services and
solutions, offering a choice of network carrier and wireless or
mobile products and services to consumers and commercial customers.
GLENTEL is an independent multicarrier mobile phone retailer in
Canada and Australia. In the
United States, GLENTEL operates two of the six National
Premium Retailers for Verizon Wireless. To its business and
government customers, GLENTEL offers wireless systems and hardware,
rental equipment, and system implementation services. GLENTEL
celebrated its 50th anniversary in 2013.
GLENTEL employs over 4,670 employees and operates approximately
1,400 locations, including 494 retail and business locations in
Canada, 735 locations in
the United States; and 147 retail
locations in Australia and
the Philippines.
About BCE
BCE is Canada's largest communications company,
providing a comprehensive and innovative suite of broadband
communication services to consumers and business customers through
the Bell Canada and Bell Aliant brands. Bell Media is Canada's premier multimedia company with
leading assets in television, radio, out of home and digital media,
including CTV, Canada's #1
television network, and the country's most-watched specialty
channels. To learn more, please visit BCE.ca.
Bell Let's Talk is a national charitable program promoting
Canadian mental health with national awareness and anti-stigma
campaigns, like Clara's Big Ride for Bell Let's Talk and Bell Let's
Talk Day, and significant Bell funding of community care and
access, research, and workplace initiatives. To learn more, please
visit Bell.ca/LetsTalk.
Caution concerning forward-looking statements
Certain
statements made in this news release are forward-looking
statements, including, but not limited to, statements relating to
the proposed acquisition by BCE Inc. (BCE) of all of the issued and
outstanding common shares of GLENTEL Inc., the expected timing and
sources of funding of the proposed transaction, certain strategic
benefits expected to result from the proposed transaction, our
network deployment and investment plans, our business outlook,
objectives, plans and strategic priorities, and other statements
that are not historical facts. Forward-looking statements are
typically identified by the words assumption, goal, guidance,
objective, outlook, project, strategy, target and other similar
expressions or future or conditional verbs such as aim, anticipate,
believe, could, expect, intend, may, plan, seek, should, strive and
will. All such forward-looking statements are made pursuant to the
"safe harbour" provisions of applicable Canadian securities laws
and of the United States Private Securities Litigation Reform Act
of 1995.
Forward-looking statements, by their very nature, are subject to
inherent risks and uncertainties and are based on several
assumptions, both general and specific, which give rise to the
possibility that actual results or events could differ materially
from our expectations expressed in or implied by such
forward-looking statements. As a result, we cannot guarantee that
any forward-looking statement will materialize and we caution you
against relying on any of these forward-looking statements. The
forward-looking statements contained in this news release describe
our expectations at the date of this news release and, accordingly,
are subject to change after such date. Except as may be required by
Canadian securities laws, we do not undertake any obligation to
update or revise any forward-looking statements contained in this
news release, whether as a result of new information, future events
or otherwise. Forward-looking statements are provided herein for
the purpose of giving information about the proposed transaction
referred to above and its expected impact. Readers are cautioned
that such information may not be appropriate for other
purposes.
The completion and timing of the proposed transaction are subject
to customary closing conditions, termination rights and other risks
and uncertainties including, without limitation, court, shareholder
and regulatory approvals, including competition and stock exchange
approvals. Accordingly, there can be no assurance that the proposed
transaction will occur, or that it will occur on the terms and
conditions, or at the time, contemplated in this news release. The
proposed transaction could be modified, restructured or terminated.
There can also be no assurance that the strategic benefits expected
to result from the proposed transaction will be realized.
For additional information on assumptions and risks underlying
certain forward-looking statements made in this news release
relating, in particular, to our network deployment and investment
plans, please consult BCE's 2013 Annual MD&A dated March 6, 2014 (included in the BCE 2013 Annual
Report) and BCE's 2014 First, Second and Third Quarter MD&As
dated May 5, 2014, August 6, 2014 and November 5, 2014 respectively, filed by BCE with
the Canadian provincial securities regulatory authorities
(available at Sedar.com) and with the U.S. Securities and Exchange
Commission (available at SEC.gov). These documents are also
available at BCE.ca.
Notice to US shareholders of GLENTEL Inc.
The
transaction contemplated by this news release involves the
securities of Canadian companies and will be subject to Canadian
disclosure requirements that are different from those of
the United States. The BCE common
shares to be issued pursuant to the plan of arrangement described
herein will not be registered under the U.S. Securities Act of 1933
pursuant to an exemption from the registration requirements of such
Act. Financial statements included or incorporated by reference in
the Circular relating to the transaction will have been prepared in
accordance with Canadian accounting standards and may not be
comparable to the financial statements of U.S. companies.
For more information
Media inquiries:
GLENTEL Inc.
Jas Boparai, Chief Financial
Officer
(604) 415-6500
investors@glentel.com
BCE
Jean Charles Robillard
(514) 870-4739
jean_charles.robillard@bell.ca
Investor inquiries:
GLENTEL Inc.
Jas Boparai, Chief Financial
Officer
(604) 415-6500
investors@glentel.com
BCE
Thane Fotopoulos
(514) 870-4619
thane.fotopoulos@bell.ca
SOURCE BCE Inc.