Telus Corporation announces friendly offer to acquire Clearnet Communications

In what will be the largest acquisition in Canadian telecommunications history, Burnaby, BC-based Telus Corporation announced on August 21, 2000, its friendly offer to acquire Scarborough, Ontario-based national digital wireless company Clearnet Communications Inc., in a cash and stock transaction valued at $6.6 billion. The acquisition of Clearnet is an additional step in Telus’ strategy to build itself into a leading national carrier through acquisitions, with the Telus CEO signalling that more significant purchases are on the horizon.

The combined entity will be the largest wireless company in Canada in terms of annual revenue and will put the company into the number one spot in the hotly competitive wireless phone business, leap-frogging Bell Canada. The offer price is to be $70 per Clearnet share, subject to aggregate consideration payable being 50 per cent cash and 50 per cent Telus non-voting shares. The offer price includes assumption of approximately $2 billion of Clearnet debt.

TD Securities and JP Morgan have provided Telus with financing for the transaction, in what is believed to be Canada’s largest bank syndication with a lending facility of $7.7 billion.

Marshalling the legal troops is Audrey Ho, Associate General Counsel at Telus. Elizabeth Harrison, Q.C., of Farris, Vaughan, Wills & Murphy in Vancouver, with assistance from Herbert D. Dodd and Gil Malfair, is acting as counsel to Telus on the deal. Michael Ryer, Stan Ebel, and Eugene Friess of Bennett Jones LLP in Calgary is providing tax advice to Telus. Osler, Hoskin & Harcourt LLP, with Stewart Douglas, Vice-President and General Counsel of Telus, are advising on competition matters and due dilligence. John Rook and Michelle Lally of Oslers have managed the competition law filing process and Robert Yalden and Martin Saipe have provided advice on a range of corporate law matters. Cleary, Gottlieb, Steen & Hamilton is acting as US counsel to Telus.

Alan Bell, Sheila Murray, Michael Gans, Tariq Taherbhai (corporate), Paul Tamaki (tax), Jack Quinn (competition), Mike Harquail (commercial) and Derek Rogers (labour) of Blake, Cassels & Graydon LLP are advising Clearnet. McCarthy Tétrault is representing the Independent Committee of the board of directors of Clearnet with a team led by Christopher S. L. Hoffmann, Graham P.C. Gow and Philip Kurtz. Milton G. Strom and Michael Smith of Skadden, Arps, Slate, Meagher & Flom LLP in New York are acting as US counsel to Clearnet and to the independent committee of its board of directors. In-house counsel involved in the deal include John H. Phillips for Clearnet and Jim Peters for Telus. A Toronto team of Jon Levin, Barbara Miller, and Kathleen Hanly and a Vancouver team of Mike Allen and Don Dalik of Fasken Martineau DuMoulin LLP are acting as counsel to the lenders in the complex structuring and financing of the bid.