Manitoba Telecom Services Inc. (MTS), has agreed to acquire all of the Class A and Class B shares of Allstream in a...
March 18, 2004
Manitoba Telecom Services Inc. (MTS), has agreed to acquire all of the Class A and Class B shares of Allstream in a transaction valued at $1.7 billion.
The proposed transaction has been structured to benefit both companies’ shareholders, allowing each to participate in the future opportunity of the expanded company, a statement issued today said.
Under the terms of the agreement, MTS will acquire all of the outstanding shares of Allstream at an offering price per Allstream share of $23 in cash plus 1.0909 MTS shares.
The offer represents a premium of approximately 19% for Allstream shareholders over the average closing price of Allstream shares on the TSX and NASDAQ as of yesterday.
To improve liquidity and reduce ownership dilution, MTS intends to undertake a substantial issuer bid of approximately $800 million of its shares following the closing of the transaction.
“This is a complementary fit that makes strategic, financial and business sense," said John McLennan, CEO of Allstream. "It provides our shareholders with value now and with continuing upside potential going forward. It creates a financially strong company with blue chip clients in Canada and the United States, and with service offerings in all segments of the industry.”
On a pro forma basis, the company will have annual revenues of more than $2 billion, in excess of 7,000 employees, a fibre based national network infrastructure and more than $2.9 billion in assets.