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 /PRNewswire/ - 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.