MONTREAL, May 8, 2018 /CNW Telbec/ - Quebecor Inc.
("Quebecor") is pleased to announce that it entered into an
agreement (the "Agreement") with Quebecor Media Inc. ("Quebecor
Media") and Caisse de dépôt et placement du Québec (the "Caisse")
to repurchase all of the share capital of Quebecor Media still held
by the Caisse. The Agreement provides that Quebecor and Quebecor
Media purchase 17,628,911 shares, representing a 18.47% stake in
Quebecor Media, with respect to which the parties have agreed on a
value of $1.690 billion.
This Agreement completes the process announced in October 2012 (and continued in September 2015 and July
2017), as part of the plan to purchase the shares of
Quebecor Media held by the Caisse that was introduced by Quebecor,
in accordance with its previously stated goal to ultimately own all
the shares of Quebecor Media.
"Thanks to its currently very favourable financial profile and
the substantial amount of cash it has on hand, Quebecor is now in a
position to complete the repurchase of the share capital of
Quebecor Media initiated in 2012. By gaining access to 100% of the
cash flows that it generates, Quebecor will now be better equipped
to seize business opportunities that arise. Ultimately, these
transactions will allow us to have complete control over our
destiny," stated Pierre Karl Péladeau, President and Chief
Executive Officer of Quebecor.
"The complete repurchase of the shares today reflects Quebecor's
solid financial position and allows la Caisse to reallocate this
capital to new investment opportunities in Quebec companies. Through the convertible
debenture, la Caisse maintains an interest in the business, while
providing Quebecor with increased financial flexibility to pursue
its growth plan. And our long-standing partnership with Quebecor
will certainly allow us, in the future, to explore new projects or
investment opportunities with the company," said Michael Sabia, President and Chief Executive
Officer of la Caisse."
"Quebecor has always been very proud, in the wake of previous
successful investments, such as the creation of Imprimeries
Quebecor in 1989, to be a partner of the Caisse. By joining forces
and working together on the creation of Quebecor Media, we created
a major Quebec group that has
become a leader in the fields of telecommunications, entertainment,
news media and culture. In doing so, we allowed Quebecers to retain
control over their technological and cultural levers, while
generating substantial benefits for our entire community," added
Pierre Karl Péladeau.
These benefits include, in particular, more than 4,000 jobs
created at Videotron in the past 15 years, and some $2 billion invested in wireless in order to offer
more choices and better prices to Québec consumers. Further
benefits include the exceptional contribution of Quebecor and its
subsidiaries to Québec audiovisual content and local journalism, as
well as its philanthropic contribution to 400 organizations in
fields as varied as culture, health, education, the environment and
entrepreneurship.
Agreement Overview
- The Agreement provides for the completion of the following two
transactions:
-
- the repurchase for cancellation by Quebecor Media of 16,064,215
shares of Quebecor Media held by the Caisse, representing
approximately 91.1% of the Caisse's interest before closing, for an
aggregate purchase price of $1.540
billion, payable in cash; and
- the purchase by Quebecor of 1,564,696 shares of Quebecor Media
held by the Caisse, representing approximately 8.9% of the Caisse's
interest before closing, in consideration of the issuance of
$150-million aggregate principal
amount of convertible debentures of Quebecor, which will be
convertible into Quebecor Class B Subordinate Voting Shares (the
Convertible Debentures), the whole subject to required
approvals, including that of the Toronto Stock Exchange.
- Upon completion of these transactions, Quebecor and Quebecor
Media will then have acquired the 18.47% stake in Quebecor Media
that Quebecor did not yet have, with Quebecor becoming the sole
owner of Quebecor Media.
Issuance of Convertible Debentures by Quebecor
Subject to the approval of the Toronto Stock Exchange, the
Convertible Debentures will have a six-year term maturing in 2024
and will bear interest at an annual rate of 4.0%, payable in
accordance with the terms of the trust indenture to be entered into
at the time of their issuance. The Convertible Debentures will be
convertible into Quebecor Class B Subordinate Voting Shares in
accordance with the terms of the trust indenture, subject to a
floor price of $26.85 per share (that
is, a maximum number of approximately 5,586,592 Quebecor Class B
Subordinate Voting Shares corresponding to a ratio of $150 million to the floor price) and a ceiling
price of $33.5625 per share (that is,
a minimum number of approximately 4,469,274 Quebecor Class B
Subordinate Voting Shares corresponding to a ratio of $150 million to the ceiling price), subject to
adjustments in accordance with the terms of the trust indenture.
The other terms and conditions of the Convertible Debentures are
expected to be substantially consistent with the terms of the
Convertible Debentures issued under Quebecor's trust agreement
dated October 11, 2012, as
amended.
Exit Rights and Quebecor Media Shareholders'
Agreement
As a result of the completion of the transactions provided for
in the Agreement, the exit rights granted to the Caisse under the
agreement entered into at the beginning of the process introduced
in 2012, including, the right to require that Quebecor Media carry
out an initial public offering (IPO), or the right to sell its
remaining interest in Quebecor Media to a financial third party,
without providing any right of first refusal or first offer to
Quebecor or Quebecor Media, will extinguish at the closing of the
operation.
The parties have also agreed to terminate the shareholders'
agreement between Quebecor, CDP Capital d'Amérique investissements
inc. (formerly Capital Communications CDPQ inc.) and Quebecor Media
dated October 23, 2000, as
consolidated and amended from time to time.
Closing
The transactions contemplated in the Agreement are currently
expected to be fully completed by June 22,
2018, subject to the customary closing conditions for
transactions of this nature and the receipt of regulatory
approvals, including that of the Toronto Stock Exchange.
TD Securities acted as financial advisor to Quebecor on the
transaction.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy or sell securities in any
jurisdiction. The securities referred to herein have not been and
will not be registered under the U.S. Securities Act of 1933
or any state securities laws and may not be offered or sold in
the United States absent
registration or an applicable exemption from the registration
requirements. The securities referred to herein have not been and
will not be qualified for distribution to the public under
applicable Canadian securities legislation.
The Toronto Stock Exchange has not reviewed and does not
accept responsibility for the adequacy or accuracy of this
release.
Cautionary statement regarding forward-looking
statements
The statements in this press release that are not historical
facts are forward-looking statements and are subject to significant
known and unknown risks, uncertainties and assumptions which could
cause Quebecor's actual results for future periods to differ
materially from those set forth in the forward-looking statements.
Forward-looking statements may be identified by the use of the
conditional or by forward-looking terminology such as the terms
"plans," "expects," "may," "anticipates," "intends," "estimates,"
"projects," "seeks," "believes," or similar terms, variations of
such terms or the negative of such terms. This press release
includes forward-looking statements on the following issues: the
timing and the completion of the transactions contemplated in the
Agreement; the fact that the closings of the transactions are
subject to the occurrence of certain events and to the receipt of
the necessary approvals, namely that of the Toronto Stock Exchange;
and the anticipated benefits of the Agreement (in particular the
impact of the Agreement on operations, the structure, capabilities,
business and other opportunities, and Quebecor's overall strategy).
Certain factors that may cause actual results to differ from
current expectations include seasonality (including seasonal
fluctuations in customer orders), operating risk (including
fluctuations in demand for Quebecor's products and pricing actions
by competitors), new competition and Quebecor's ability to retain
its current customers and to attract new ones, risks associated
with the fragmentation of the advertising market, insurance risk,
risks associated with capital investment (including risks related
to technological development and equipment availability and
breakdown), environmental risks, risks associated with
cybersecurity and the protection of personal information, risks
associated with collective agreements, credit risk, financial
risks, debt risks, risks related to interest rate fluctuations,
foreign exchange risks, risks associated with government acts and
regulations, risks related to changes in tax legislation, and
changes in the general political and economic environment and, as
they relate to the Agreement, potential risks include the
following: non-receipt of regulatory approvals (including the
receipt of the approval of the Toronto Stock Exchange) or the delay
in receipt thereof or the non-compliance with the conditions
related to the implementation of the Agreement or the delay in the
implementation thereof; or the occurrence of an event that would
allow the Caisse to terminate its obligations under the Agreement.
Investors and others are cautioned that the foregoing list of
factors that may affect future results is not exhaustive and that
undue reliance should not be placed on any forward-looking
statements. The forward-looking statements described in this press
release are based on the following significant assumptions
regarding the Agreement: compliance with all closing conditions and
the performance of the transactions covered by the Agreement
according to the planned schedule, including receipt of approvals
from the regulatory bodies (including the Toronto Stock Exchange).
For more information on the risks, uncertainties and assumptions
that could cause Quebecor's actual results to differ from current
expectations, please refer to Quebecor's public filings available
at www.sedar.com and www.quebecor.com,
including, in particular, the "Risks and Uncertainties"
section in Quebecor's Management Discussion and Analysis for the
year ended December 31, 2017.
The forward-looking statements in this press release reflect
Quebecor's expectations as of the date of this press release and
are subject to change after that date. Quebecor expressly disclaims
any obligation or intention to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as required by applicable securities laws.
About Quebecor
Quebecor, a Canadian leader in telecommunications,
entertainment, news media and culture, is one of the
best-performing integrated communications companies in the
industry. Driven by their determination to deliver the best
possible customer experience, all of Quebecor's subsidiaries and
brands are differentiated by their high-quality, multiplatform,
convergent products and services.
Quebecor (TSX: QBR.A, QBR.B) is headquartered in Québec and
employs more than 10,000 people in Canada.
A family business founded in 1950, Quebecor is strongly
committed to the community. Every year, it actively supports more
than 400 organizations in the vital fields of culture, health,
education, the environment and entrepreneurship.
Visit our website: www.quebecor.com
Follow us on Twitter: twitter.com/Quebecor
SOURCE Quebecor