AT&T Canada Inc -
AT&T to make cash takeover bid for TigerTel shares
AT&T Canada Inc
TEL.B
Shares issued 46,260,399
1999-11-26 close $55.05
Monday Nov 29 1999
Also TigerTel Inc (TTEL)
Mr. Jim Meenan reports
AT&T Canada entered into an agreement with TigerTel Inc.
pursuant to which AT&T Canada has agreed, subject to the
satisfaction of certain conditions, to make an all-cash takeover
bid for 100 per cent of TigerTel's common shares at a price of
$9.25 per share.
Upon the unanimous recommendation of a special committee
of the board of directors, the board of directors of TigerTel
has unanimously agreed to support the bid and recommend it
to the holders of common shares.
AT&T Canada has also entered into an agreement with
Applied Digital Solutions, Inc., the controlling shareholder of
TigerTel and the holder of 4,942,284 common shares of
TigerTel (representing approximately 65 per cent of the
outstanding common shares on a fully diluted basis), pursuant
to which Applied has agreed to deposit its common shares of
TigerTel under the bid once it is made.
Based on the 7,506,297 common shares outstanding on a fully
diluted basis as at Nov. 24, 1999, the total value of the bid is
approximately $69.4-million.
TigerTel is a Canadian business telecommunications provider
that derives the bulk of its revenue from managing
telecommunications services by outsourcing the planning,
administration and support of telecommunications services on
behalf of large business customers. In addition, the company
offers telecommunications services to business customers on a
resale basis and operates 13 call centres across Canada which
provide a variety of outsourced tele-sales and tele-service
offerings on behalf of business customers.
TigerTel has approximately 15,000 business customers and
500 employees across Canada. TigerTel is expected to
generate approximately $50-million in revenue in 1999 and be
approximately EBITDA-neutral. The transaction is expected
to close before the end of this year, subject to all conditions
being satisfied.
"We're extremely pleased to announce this agreement," said
Jim Meenan, vice-chairman and chief executive officer,
AT&T Canada. "TigerTel has built a strong business customer
base by offering products and services that complement those
that we offer today. We expect to leverage our local and
long-haul fibre optic networks by migrating a significant
portion of their resale traffic onto our own networks. We also
expect TigerTel to enhance our significant, existing managed
network services capabilities."
"We look forward to the opportunity to join the AT&T Canada
team," said Don Swift, CEO of TigerTel. "We're confident
that our team will contribute to the significant growth
opportunities within the Canadian business
telecommunications market. We bring a talented group of
employees and a unique set of services within the business
market."
The bid will be subject to a number of conditions customary
for a transaction of this type and certain additional conditions
that are required to be satisfied prior to the payment for
common shares tendered.
These conditions include, but are not limited to, at least 90 per
cent of the outstanding common shares of TigerTel being
tendered to the bid, receipt of Competition Act approval,
approval of a special resolution of the holders of
exchangeable shares of TigerTel's subsidiary, TigerTel
Services Limited, to amend the terms of such shares providing
for its early redemption and the sale by TigerTel Services
Limited to Applied Digital Solutions, Inc. of its direct and
indirect interest in Consolidated Technologies Holdings Inc.
and its subsidiaries.
In the event of the termination of the agreement between
AT&T Canada and TigerTel, under certain circumstances,
AT&T Canada would be entitled to a termination fee of
approximately $3.5-million. These circumstances include
TigerTel's board withdrawing or modifying its approval of the
transaction or Tigertel's board approving or recommending a
transaction which it determines is superior to the AT&T
Canada transaction.
About TigerTel Inc.
TigerTel Inc. was created in June, 1999, through the merger of
TigerTel Services Limited and Contour Telecom Management
Inc. TigerTel shares are traded on the Canadian Dealing
Network under the symbol TTEL.
WARNING: The company relies on litigation protection for
"forward-looking" statements. |
