BCE acquisition of MTS set to close March 17, 2017 with today's receipt of final regulatory approvals

WINNIPEG, Feb. 15, 2017 /CNW/ - (TSX: MBT) Manitoba Telecom Services Inc. (MTS) today announced that the Competition Bureau and Innovation, Science and Economic Development Canada (ISED) have approved the acquisition of MTS by BCE Inc. (BCE) pursuant to the previously announced plan of arrangement (the Arrangement). Closing of the Arrangement has been set for March 17, 2017.

The close of the Bell MTS transaction concludes a period of tremendous change at MTS. Over the past several years, MTS undertook a significant transformation effort affecting all aspects of the company.

"The close of this transaction will represent a watershed moment in Manitoba's business history, delivering over $1 billion of value to shareholders while securing investment and community commitments which are so important to the future of the province," said David Leith, Chair of the Board of Directors for MTS. "On behalf of the Board I want to recognize the tremendous job Jay Forbes has done at MTS since joining in January 2015. Together with the entire management team, MTS became stronger and more focused to deliver maximum value to customers and to shareholders. The value created through the Bell MTS combination is in no small part due to these significant achievements."

"This announcement represents the culmination of a successful approach to the regulatory approval process and we look forward to closing the transaction within the timelines we provided at the outset," said Jay Forbes, President & CEO. "Our employees should be proud of all that we have accomplished as a stand-alone company, and can look forward with excitement to a bright future as Bell MTS. I want to thank my colleagues at MTS for the dedication and commitment they have shown. They bring tremendous talent and energy to work every day on behalf of our customers. Now, with the creation of Bell MTS, they will have the benefit of scale and significant investment to bring customers the world-class telecommunications services the province of Manitoba needs for the future."

CLOSING AND ELECTION DATE
The MTS Board, after careful consideration and consultation with its legal and financial advisors, has agreed with BCE to set March 17, 2017, as the closing date for the Arrangement. As a result, the Election Deadline will be March 14, 2017.  

A detailed description of the Arrangement is set forth in the MTS management information circular dated May 26, 2016 (the Circular). Shareholders can obtain a copy of the Circular as filed with the Canadian provincial securities regulatory authorities at www.SEDAR.com.

The letter of transmittal and election form that was previously mailed to registered MTS shareholders, and is also available on our website at www.mts.ca/investors and on www.SEDAR.com, explains how registered shareholders can deposit their MTS common shares, elect the form of consideration they wish to receive and obtain payment for their MTS common shares once the Arrangement is completed. The letter of transmittal and election form also includes disclosure on the U.S. federal income tax considerations with respect to the Arrangement for U.S. tax payers, which was not determinable at the time the Circular was mailed. MTS shareholders in the United States are urged to read this disclosure.

March 17, 2017 has been adjusted from the default closing timeline contemplated by the Arrangement Agreement. The terms of the Arrangement Agreement anticipated that the parties could select an alternative closing date, and the parties determined to do so in this instance. Proper closing will require completion of a series of necessary legal steps, including a series of reorganizations. Given these requirements the Board, upon receipt of legal advice, determined that March 17, 2017 represented the earliest practical closing date available. In making this decision, the Board recognized that this closing date would, among other things, allow for completion of all required regulatory matters and the necessary time to allow all contemplated pre-closing steps for this complex transaction to be completed in accordance with applicable laws within the shortest reasonable period of time. Shareholders will also have additional time to make the election of consideration contemplated by the Arrangement.

MTS and BCE have given effect to the March 17, 2017 closing date by entering into an agreement, a copy of which will be filed with the Canadian securities regulators and will be available at www.SEDAR.com. Under this agreement MTS and BCE have also each agreed, among other things, to deliver the necessary certifications with respect to their respective representations, warranties and covenants to the standards required under the Arrangement Agreement as of February 28, 2017, and to reconfirm the same, subject to certain modifications, on the closing date. MTS has also agreed to certain additional covenants relating to the assets to be divested by BCE. In addition, BCE has agreed to waive its right to terminate the Arrangement Agreement in the event of an uncured material adverse effect of MTS arising after February 28, 2017. The amount of the reverse break fee payable by BCE in certain circumstances has also been increased from $120 million to $200 million.

Election of Consideration
MTS shareholders may elect to receive either (i) the cash consideration of $40.00 per MTS common share, or (ii) the share consideration of 0.6756 of a BCE common share for each MTS common share. Shareholders may only elect to receive cash consideration or share consideration for all their shares; shareholders may not elect to receive a combination of cash and shares. However, any election by a shareholder is subject to proration and rounding, such that the aggregate consideration to be paid to MTS shareholders will be 45% in cash and 55% in BCE common shares, and therefore shareholders may ultimately receive a combination of cash and BCE common shares by operation of the proration provisions of the Arrangement.

Election Deadline Announced
Registered shareholders may make an effective election by depositing with Computershare Trust Company of Canada, on or prior to 5:00 p.m. (Toronto time) on March 14, 2017, a duly completed letter of transmittal and election form indicating their election, together with the certificates (if applicable) representing their MTS common shares. The letter of transmittal and election form is available on our website at www.mts.ca/investors and on www.SEDAR.com or by contacting Computershare Trust Company of Canada. Any questions regarding receipt of the cash or share consideration, including any request for another copy of the letter of transmittal and election form, should be directed to Computershare Trust Company of Canada by phone at 1-877-982-8757 (toll free in North America) or by email at corporateactions@computershare.com.

Non-registered shareholders that hold MTS common shares through an intermediary, such as a broker, investment dealer, bank or trust company, should carefully follow the instructions and deadlines from the intermediary that holds shares on their behalf and should contact such intermediary with any questions about their election. Shareholders who may have made an election through an intermediary prior to the date of this news release may wish to contact their intermediary prior to the election deadline to verify that their election has been made properly.  

Any MTS shareholder who fails to properly make an election prior to 5:00 p.m. (Toronto time) on March 14, 2017 will be deemed to have elected to receive, for each MTS common share, the cash consideration, subject to proration and rounding. MTS recommends that MTS shareholders take the necessary steps to ensure that their letter of transmittal and election form is returned to Computershare Trust Company of Canada by 5:00 p.m. (Toronto time) on March 14, 2017. There can be no guarantee that Canada Post will be able to deliver the letter of transmittal and election form and enclosures by such time, and MTS shareholders using a courier service or mailing through Canada Post, by regular post, registered mail or otherwise, do so at their own risk.

An MTS shareholder who has elected to receive share consideration or cash consideration but, because of proration, receives a combination of BCE common shares and cash, will be required to make a joint election to obtain a full or partial tax deferral. A tax instruction letter providing certain instructions on how to complete the tax election may be obtained at BCE's website at bce.ca/investors/shareholder-info/mts-acquisition on closing, which is expected on March 17, 2017.

Advisors and Legal Counsel
MTS' financial advisors are Barclays Capital Canada Inc., CIBC World Markets Inc. and TD Securities Inc. MLT Aikins LLP and Stikeman Elliott LLP are serving as legal counsel to MTS. DFH Public Affairs is serving as public affairs and communications counsel to MTS.

Forward-looking statements disclaimer
This news release contains forward-looking statements and information (collectively, the "forward-looking statements") including, but not limited to, those relating to the proposed acquisition by BCE of all of the issued and outstanding MTS common shares, the satisfaction or waiver of conditions to the closing of the Arrangement, the scheduled closing date of the Arrangement, the benefits expected to result from the Arrangement and other statements that are not historical facts.

As a consequence, actual results in the future may differ materially from any expectation, conclusion, forecast or projection in such forward-looking statements. Therefore, forward-looking statements should be considered carefully and undue reliance should not be placed on them. Examples of statements that constitute forward-looking information may be identified by words such as "believe", "expect", "project", "should", "anticipate", "could", "target", "forecast", "intend", "plan", "outlook", "see", "set", "pending", and other similar terms. All forward-looking statements are made pursuant to the safe harbour provisions of applicable Canadian securities legislation.

Forward-looking statements are subject to risks and uncertainties and are based on several assumptions, both general and specific, which give rise to the possibility that actual results or events could differ materially from our expectations expressed in or implied by such forward-looking statements. As a result, we cannot guarantee that any forward-looking statement will materialize and we caution you against relying on any of these forward-looking statements. The forward-looking statements contained in this news release describe our expectations at the date of this news release and, accordingly, are subject to change after such date. Except as may be required by Canadian securities laws, we do not undertake any obligation to update or revise any forward-looking statements contained in this news release, whether as a result of new information, future events or otherwise. Forward-looking statements are provided herein for the purpose of giving information about the proposed transaction referred to above and its expected impact. Readers are cautioned that such information may not be appropriate for other purposes.

Completion of the Arrangement remains subject to a number of conditions precedent and termination rights, some of which are outside of MTS' control, including, without limitation, the operation and performance of the MTS business in the ordinary course until closing of the Arrangement, the maintenance of the required regulatory approvals, the maintenance of legality of closing and compliance by MTS with various other covenants contained in the Arrangement Agreement, all of which are subject to important risks, uncertainties and assumptions. There can be no certainty, nor can MTS provide any assurance, that all conditions precedent to the Arrangement will be satisfied or waived and that the Arrangement will occur, or, if satisfied or waived, when they will be satisfied or waived or that the expected closing date will occur. There can also be no assurance that the strategic, operational or financial benefits expected to result from Arrangement will be realized.

For additional information on the assumptions and risks underlying certain forward-looking statements made in this news release, please see the Circular, a copy of which can be obtained at www.SEDAR.com.

About MTS
MTS delivers a full suite of information and communications services for Manitobans – Wireless, Internet, TV, Phone Service and Security Systems plus a full suite of Information Solutions, including Unified Cloud and Managed Services.

MTS actively gives back to organizations that strengthen communities, providing sponsorships, grants and scholarships, value-in-kind support and volunteer commitment in Manitoba.

MTS Inc. is wholly owned by Manitoba Telecom Services Inc. (TSX: MBT). For more on MTS' products and services, visit mts.ca. For investor information, visit www.mts.ca/aboutus.

SOURCE Manitoba Telecom Services Inc.

For further information: Investors: Brenda McInnes, Investor Relations, 204-941-6205, investor.relations@mts.ca; Media: Jeremy Sawatzky, Corporate Communications, 204-958-3230, media.relations@mts.ca

RELATED LINKS
http://www.mts.mb.ca

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