Rogers Communications to Strengthen Core Business through Strategic
Transactions with Shaw Communications
Rogers to secure option to purchase AWS spectrum in
2014;
Expands cable operations by acquiring Hamilton Cable
Assets;
Sale of minority interest in TVtropolis
TORONTO,
Jan. 14, 2013 /CNW/ - Rogers
Communications announced today that it has signed agreements with
Shaw Communications to secure an Option to purchase Shaw's AWS
spectrum holdings in 2014, and to acquire Shaw's cable system in
Hamilton, Ontario - Mountain
Cablevision Limited ("Mountain"). Shaw will also acquire
Rogers' one-third interest in TVtropolis and will enter into
negotiations with Rogers for the provision of certain services in
Western Canada. Rogers net cash
investment is expected to total approximately $700 million once all aspects of the transactions
are completed.
"The agreements will benefit businesses and consumers across the
country and fit squarely within our focused, strategic game plan,"
said Nadir Mohamed, President and
Chief Executive Officer. "We're investing in spectrum to ensure our
customers continue to enjoy the incredibly fast speeds and
throughput they crave, while ensuring our continued network
leadership. We're also strengthening our Cable portfolio by
acquiring a valuable cable business which complements our existing
Ontario cable system allowing us
to deliver even more value for our customers and shareholders."
Data usage is exploding and additional wireless spectrum is
needed to meet this growing demand by consumers and businesses for
mobile Internet services. The acquisition of Shaw's unused spectrum
will ensure Rogers maintains its network leadership position,
particularly in Western Canada
where Rogers has a significant share of the wireless market. Shaw's
AWS spectrum holdings cover 188 million MHz POPs including 20 MHz
across B.C., Alberta and
Manitoba and 10 MHz in select
B.C., Alberta, Saskatchewan and Northern Ontario markets. Under this
agreement Rogers has acquired an option to purchase this spectrum
and the option may be exercised only following receipt of Industry
Canada and Competition Bureau approval. If approved by
Industry Canada and the Competition Bureau, the purchase of the
spectrum following an exercise of the option would likely take
place in late 2014.
The acquisition of Mountain expands Rogers cable business in the
southern Ontario area and is
immediately adjacent to its already highly clustered cable network.
This acquisition will allow Rogers to drive synergies through
increased product penetration of its wireless services, as well as
through cost efficiencies. Mountain delivers a full bundle of
advanced cable television, Internet and telephony services over its
recently upgraded hybrid fiber coax network. The Cable transaction
is expected to close in the first half of 2013, pending regulatory
approvals.
TVtropolis is a specialty TV network seen across Canada, specializing in bringing viewers some
of the most widely watched shows ever broadcast. This sale will
provide Shaw with 100 percent ownership of TVtropolis and, under
the terms of the agreement, Rogers will continue to have access to
TVtropolis content for broadcast to all of its cable subscribers.
The sale of TVtropolis is expected to close in the first half of
2013, pending regulatory approval.
The cash consideration for the transactions includes a
$250 million deposit for Mountain, as
well as a $50 million payment for the
Option to purchase the spectrum holdings. Upon the closing of the
Mountain component, total cash consideration of $400 million will have been paid in respect of
this cable business - an amount that includes not only the value of
Mountain, but also takes into consideration the value of the bundle
of transactions taken together, as well as consideration for the
timing of cash payments between the parties. Rogers will receive
$59 million for the sale of
TVtropolis, to be received as a deposit on today's signing of
agreements. Final consideration for the spectrum will be payable if
Rogers exercises its Option and the spectrum licenses are acquired,
and will take into account the terms of the services
agreement between Rogers and Shaw. The Option will be
exercisable from the date on which regulatory approvals permit such
exercise and the transfer of the spectrum licenses until expiry in
March 2015, subject to extension in
certain circumstances. The transactions are not conditional on the
closing of any other transactions and remain subject to customary
conditions, including applicable regulatory approvals as referred
to above.
Caution Regarding Forward-Looking Statements, Risks and
Assumptions:
This release includes "forward-looking information" within the
meaning of applicable securities laws and assumptions concerning
the acquisition of wireless spectrum and cable assets and sale of a
specialty TV property minority interest as detailed above. We
caution that all forward-looking information is inherently subject
to change and uncertainty and that actual results may differ
materially from those expressed or implied by the forward-looking
information. A number of risks, uncertainties and other factors
could cause actual results and events to differ materially from
those expressed or implied in the forward-looking information or
could cause our current objectives, strategies and intentions to
change, including but not limited to various regulatory approvals.
Many of these factors are beyond our control and current
expectation or knowledge. Should one or more of these risks,
uncertainties or other factors materialize, our objectives,
strategies or intentions change, or any other factors or
assumptions underlying the forward-looking information prove
incorrect, our actual results and our plans could vary
significantly from what we currently foresee. Accordingly, we warn
investors to exercise caution when considering statements
containing forward-looking information and that it would be
unreasonable to rely on such statements as creating legal rights
regarding our future results or plans. We are under no obligation
(and we expressly disclaim any such obligation) to update or alter
any statements containing forward-looking information, the factors
or assumptions underlying them, whether as a result of new
information, future events or otherwise, except as required by law.
All of the forward-looking information in this earnings release is
qualified by the cautionary statements herein.
About the Company:
Rogers Communications is a diversified Canadian communications
and media company. We are engaged in wireless voice and data
communications services through Wireless, Canada's largest wireless provider. Through
Cable, we are one of Canada's
leading providers of cable television services as well as
high-speed Internet access and telephony services. Through Media,
we are engaged in radio and television broadcasting, televised
shopping, magazines and trade publications, and sports
entertainment. We are publicly traded on the Toronto Stock Exchange
(TSX: RCI.A and RCI.B) and on the New York Stock Exchange (NYSE:
RCI). For further information about the Rogers group of companies,
please visit www.rogers.com.
SOURCE Rogers Communications Inc.