Pas --
Thanks for comments on the 36170. Do you know if this makes the 36140/44 redundant?
Just found this:
Canada's BC TELECOM and TELUS to merge
Reuters Story - October 19, 1998 22:48
(updates throughout, adds reaction company comments)
By Allan Dowd
VANCOUVER, Oct 19 (Reuters) - Canada's second- and third-largest telephone companies, BC TELECOM Inc. and TELUS Corp. , announced on Monday a "merger of equals", a move they said is a first step to creating a national telecommunications company.
The two western Canadian-based companies, which were forced to confirm a much-rumored phone romance last week, wasted no time and announced they had made a deal for a fiber optic link to eastern Canada. This gives them some infrastructure with which to challenge Ontario-based rival Bell Canada, a subsidiary of giant BCE Inc. and the largest phone company in Canada.
"While we're proud to remain a western Canada-based company we intend to expand our operations aggressively, not just in western Canada but across the country," BC TEL Chairman Brian Canfield told reporters.
BC TEL shareholders will get one share in the new company - tentatively called BCT.TELUS Communications Inc. - for each share held, while TELUS shareholders will get 0.7773 share for each of their current shares. No cash will be exchanged in the transaction, officials said.
The new company will have a market capitalization of about C$10 billion with combined revenues of nearly C$6 billion and assets of just over C$8 billion, based on figures from the quarter ending June 30, company officials said.
Both British Columbia's BC Tel and Alberta's TELUS had made their growth intentions well known, and analysts said they would be a logical rival to Bell Canada.
"This for the first time creates a national competitor which has resources that at least gets into Bell Canada's league," said Ian Angus, analyst at Angus Telemanagement Inc., who said the merger is particularly good news for business phone customers.
Company officials said it was premature to say what Monday's announcement would mean for the Stentor Alliance of Canada's "Baby Bell" phone companies, but that it did not mean the already scaled-back marketing and cooperation alliance was now doomed. Bell Canada, TELUS and BC TEL are all Stentor members.
TELUS shook up Stentor earlier this year when it tried unsuccessfully to work out a merger with AT&T Canada Long Distance Service Co. AT&T, a partly owned unit of AT&T Inc., will have no role in the new company, officials said.
The merger has the blessing of Stamford, Conn.-based GTE Corp. , which owns about 51 percent of BC TELECOM. It will have a 26 percent stake in BCT.TELUS, and will offer the company access to its global system and support.
The companies said on Monday they had signed a deal to acquire fiber-optic links into eastern Canada from Ledcor Industries. Ledcor will provide a fiber ring through southern Ontario and Quebec as well as links from Montreal to Albany and Vancouver to Seattle.
Canfield and new company President George Petty sidestepped questions about whether BCT.TELUS had its sights set on the phone companies in the neighboring provinces of Saskatchewan and Manitoba, SaskTel and Manitoba Telecom Service Inc., both of which have been named as potential acquisition targets.
TELUS and BC TEL have a combined workforce of more than 25,000. Officials said their were clearly redundancies in their operations, but that no decision had been made on the scope of any layoffs.
The merged company, which will have headquarters in both Edmonton and Vancouver, is expected to produce annual synergies in the third year of C$250 million in operating costs and C$115 million in capital costs.
Under the agreement, BC TEL's Canfield will become the new company's chairman while TELUS' Petty will be the president and chief executive. Shareholders are expected to vote on the plan in January.
TELUS' shares closed up C$1.20 to C$33.70 on the Toronto Exchange. BC TELECOM was up C$0.85 to C$43.25.
($1 = $1.55 Canadian)
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And from the WSJ:
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The Wall Street Journal Interactive Edition -- October 20, 1998
GTE's Posts 8.7% Increase in Net;
Canadian Unit to Merge With Telus
By STEPHANIE N. MEHTA
Staff Reporter of THE WALL STREET JOURNAL
GTE Corp. posted an 8.7% gain in third-quarter net income, reflecting growth in long-distance and data-service revenue.
The Irving, Texas, telecommunications company reported net income of $822 million, or 85 cents a diluted share, compared with $756 million, or 79 cents a diluted share, a year earlier. Analysts surveyed by First Call expected the company to earn 84 cents a share. Daniel F. O'Brien, chief financial officer, said he is comfortable with analysts' estimates that the company will earn about $3.06 a share in 1998.
GTE, which expects to close its proposed $52 billion merger with Bell Atlantic Corp. by August 1999, pointed out that net-income figures for the current and year-earlier quarters include costs associated with its push into data services.
In New York Stock Exchange composite trading Monday, GTE shares rose 25 cents to close at $56.75.
Revenue for the quarter grew 9.1% to $6.48 billion. Strong sales of long-distance and data services helped offset the impact of an unfavorable currency translation on GTE's Canadian operations.
Separately, GTE said Monday it plans to take an expanded role in the Canadian telecommunications industry, as its BC Telecom Inc. affiliate agreed to merge with Telus Corp. in a transaction valued at 4.73 billion Canadian dollars (US$3.06 billion). GTE currently owns 51% of BC Telecom and will hold just over 26% of the combined company.
The companies, which last week announced they were in merger talks, have combined annual revenue of C$6 billion and 25,000 employees, based on 1997 figures.
Telus, of Edmonton, Alberta, and BC Telecom, of Vancouver, British Columbia, are joining forces to combat heightened threats from industry leader Bell Canada, as deregulation results in greater competition in the Canadian industry.
Other U.S. companies with phone holdings in Canada include Sprint Corp., Kansas City, Mo., which owns 25% of Call-Net Enterprises Inc., of Toronto. AT&T Corp. owns 33% of AT&T Canada Long Distance Services Co., also of Toronto.
In addition, Excel Communications Inc., of Dallas, and Teleglobe Inc., of Montreal, have agreed to merge.
-- Solange De Santis contributed to this article. >>>> |
