BELLEVUE, Wash./BETHESDA, Md.--(BUSINESS WIRE)--June 23, 1999--
-- Agreement to Merge at 0.825 VoiceStream Shares Plus $8 in Cash
for Each Omnipoint Share Hutchison Telecommunications Limited
Invests Additional $957 Million --
VoiceStream Wireless Corporation (Nasdaq:VSTR.O), and Omnipoint
Corporation (Nasdaq:OMPT.O) announced today that their respective Boards
of Directors have unanimously approved a definitive agreement to
merge.
VoiceStream also announced today that Hutchison
Telecommunications PCS (USA) Limited (Hutchison USA), a subsidiary of
Hutchison Telecommunications Limited and a shareholder in VoiceStream,
has committed to make an additional cash investment of $957 million
into the combined company. In addition, VoiceStream announced today
that Cook Inlet Region Inc. (CIRI) has agreed to make an investment in
a newly created joint venture owned 50.1% by CIRI and 49.9% by
VoiceStream, in order to acquire the designated entity licenses held
by Omnipoint Corporation. The total value of these transactions is
over $9 billion.
"The combination of VoiceStream Wireless and Omnipoint brings
together two major providers of GSM (Global System for Mobile
Communications) in the United States making the combined company one
of the largest licensees in the world employing GSM technology" said
John W. Stanton, chairman and chief executive officer of VoiceStream
Wireless. "After the merger the combined company, together with CIRI,
will have licenses to provide service to over 175 million people with
operating systems from New York to Hawaii. With licenses in 17 of the
top 25 markets, the combined company together with CIRI will be one of
the major providers of telecommunications services in the country."
"This merger brings together two great companies, Omnipoint and
VoiceStream" said Doug Smith, chairman and chief executive officer of
Omnipoint. "The combined company provides service to over one million
customers. As the second largest PCS license holder and the fourth
largest wireless company in the United States in terms of people in
licensed areas, the combined company will reap the benefits of
increased scale and scope. The combination of our two companies will
be beneficial for consumers and will create opportunities for both
employees as well as shareholders as the new business competes in the
telecommunications marketplace."
"Hutchison owns interests in wireless systems in twelve countries
in five continents. We made our initial investment in VoiceStream in
1997" a Hutchison Whampoa spokesman said. "Through our association
with VoiceStream Wireless we are excited about this unique opportunity
to participate in the current rapid growth in wireless
telecommunications in the United States. The U.S. mobile market is one
of the largest and most exciting growth opportunities in the world
today for digital mobile communications. Following the merger,
VoiceStream will be the largest GSM operator in the country. As
VoiceStream's largest shareholder both before and after the merger,
the investment represents a significant step in expanding Hutchison's
global presence in the mobile communications business."
"We are excited to participate in this transaction with
VoiceStream and Omnipoint," said Carl H. Marrs, president and chief
executive officer of CIRI. "With this transaction, and the recent PCS
auction results, CIRI becomes one of the nation's most significant
Designated Entity providers of PCS service. This helps fulfill the
FCC's and Congress' goals for this important program."
VoiceStream and Omnipoint Merger
VoiceStream Wireless and Omnipoint Corporation will enter into a
merger in which VoiceStream will exchange 0.825 shares of VoiceStream
common stock plus $8.00 in cash for every share of Omnipoint common
stock. There will be a cash or share election option available to
shareholders of Omnipoint subject to proration. VoiceStream said that
it expects thestock portion of the offer will be tax-free to
Omnipoint shareholders. This merger is subject to shareholder approval
as well as federal, state, and other regulatory approvals including
those of the Federal Communications Commission, and the Department of
Justice. Major shareholders have agreed irrevocably to vote for the
merger. VoiceStream also has committed to invest $150 million in
Omnipoint prior to the close of the merger, including approximately
$100 million to be provided immediately. The merger is expected to
close in the fourth quarter of 1999.
Hutchison USA Investment
Hutchison USA will be making an investment of $957 million into
the combined company for common and convertible preferred securities.
The preferred provides for a 2.5% cumulative dividend payable at
maturity (40 years) and if converted all accrued dividends will be
canceled. A component of this investment will be used as interim
financing to purchase $150 million of convertible preferred stock of
Omnipoint on the same terms as VoiceStream, of which approximately
$100 million will be provided immediately, which upon closing will be
converted into equity of VoiceStream. The remaining $807 million will
be invested into the combined company upon the closing of the merger.
Hutchison USA is currently the largest shareholder of VoiceStream
stock, owning 24% of the company. Pro forma for the merger and its
additional investment, Hutchison USA will own approximately 30% of the
combined company on the exercise of certain conversion rights.
CIRI Investment
CIRI and VoiceStream will form new joint ventures to acquire
certain designated entity communications licenses from Omnipoint upon
closing of the merger. CIRI will own 50.1% interest and VoiceStream
will own the remaining 49.9% of the ventures. CIRI and VoiceStream
have two existing joint ventures and have been successfully working
together since 1995.
Management
John W. Stanton will remain the chairman and chiefexecutive
officer of VoiceStream. Doug Smith, the current chairman of Omnipoint,
will become a vice chairman of VoiceStream, will continue as chairman
of Omnipoint Technologies, and will also lead the development of a
wireless data strategy for the combined company.
Based in Bellevue, Wash., VoiceStream Wireless Corp. is a leading
provider of wireless communications services in the western United
States including Denver, Phoenix, Seattle, Salt Lake City, and
Portland. VoiceStream Wireless currently provides personal
communications service using the globally dominant GSM technology in
eleven U.S. markets. In conjunction with joint ventures, VoiceStream
currently provides PCS service in four additional markets. Goldman,
Sachs & Co. acted as advisor to VoiceStream Wireless.
Founded in 1987, Omnipoint is a leader in commercializing PCS.
Omnipoint currently provides advanced wireless communications services
in the eastern United States, including New York, Philadelphia,
Boston, Miami, and Detroit. Omnipoint Technologies, Inc. is a leading
developer and supplier of wireless communication technologies,
products and engineering services. Allen & Company and Lehman Brothers
acted as advisors to Omnipoint Corporation.
Hutchison Whampoa Limited, a conglomerate headquartered in Hong
Kong, is engaged in five core businesses: telecommunications; ports
and related services; property development and holdings; retail,
manufacturing and other services; and energy and infrastructure. In
the international telecom arena, Hutchison owns approximately 44% of
Orange plc, which operates the fastest growing PCS network in the
United Kingdom and telecom businesses in France, Germany, Switzerland,
Austria and Belgium. Hutchison also operates telecom businesses in
Hong Kong, Australia, Israel, India, Singapore, Thailand, Malaysia,
Indonesia, Sri Lanka and Ghana. Chase Securities Inc. acted as advisor
to Hutchison USA.
CIRI, based in Anchorage, Alaska, is an Alaska Native regional
corporation with investments in nationwide communications, tourism,
real estate, and construction and equipment services. CIRI is owned by
6,900 Alaska Native shareholders of Eskimo, Indian, and Aleut descent.
--30--ALW/se*
CONTACT: VoiceStream Wireless Corporation
Ken Prussing, 425/586-8072
ken.prussing@VoiceStream.com
www.voicestream.com
or
Omnipoint Investor Relations
Laura Knight, 301/951-2517
lknight@omnipoint-corp.com
www.omnipoint.com
KEYWORD: WASHINGTON MARYLAND
INDUSTRY KEYWORD: TELECOMMUNICATIONS COMPUTERS/ELECTRONICS COMED
MERGERS/ACQ
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