$80 Million Deal Signed; Bell Litigation Settled
TORONTO and MONTREAL, May 5 /CNW/ - Look Communications Inc. (TSX
Venture: LOK and LOK.A) today announced that it has reached an agreement with
Rogers Communications and Bell Canada (through their joint venture, Inukshuk
Wireless Partnership ("Inukshuk")), for the sale of its spectrum and broadcast
Under the agreement, Inukshuk will pay Look $80 million for Look's 92 MHz
of spectrum covering approximately 1.8 billion MHz/Pops. As part of the
agreement, Look has also resolved its outstanding litigation with Bell. The
agreement is subject to Court approval.
"We have long believed that our assets held value given the promise of
mobile broadband. That promise is becoming a reality for Canadian businesses
and consumers, both of whom will benefit from the mobile entertainment,
information and communication services that are now available," said Gerry
McGoey, Vice Chairman and Chief Executive Officer of Look. "Bell and Rogers,
through Inukshuk, clearly recognize the importance of mobility and bring their
combined brands, expertise, resources and commitment to delivering this vital
service to Canadians."
The Agreement of Purchase and Sale (the "Agreement") allows Inukshuk to
acquire Look's spectrum (2596 to 2686 MHz and 2689 to 2690 MHz inclusive) for
$80 million cash. Payment is scheduled in three instalments and the purchased
spectrum will not be transferred unless and until full consideration is paid.
If for any reason the full $80 million is not paid, or not paid according to
the agreed upon schedule, any payments made to Look are non-refundable and the
spectrum would be retained by Look. The payment schedule is as follows:
1. A $30 million non-refundable payment will be made upon Court approval
of the Agreement;
2. A $20 million non-refundable payment will be made no later than
December 31, 2009; and
3. A $30 million final payment will be made no later than the earlier of
regulatory approval of the transaction or 36 months from the closing
upon Court approval.
The Agreement is the culmination of a sales process undertaken by Look,
with the approval of its shareholders, pursuant to its Plan of Arrangement
proceedings. The Ontario Superior Court of Justice (the "Court") approved the
process with the granting of the Sales Process Order on January 21, 2009.
Look's Board of Directors and Grant Thornton Limited, the Court appointed
Monitor, will recommend approval of the transaction by the Court. In
accordance with the Sales Process Order, Look is applying to the Court for the
final approval of the Agreement. The Agreement does not require further Look
shareholder approval and is expected to close in May 2009.
Look believes that Inukshuk is interested in finalizing the Agreement as
soon as possible and therefore Look will commence the orderly wind down of its
present operations over the course of the next 90 days. Further details of
this action will be provided to Look's subscribers over the next few weeks.
A condition precedent to the Agreement was the resolution of the
litigation between Look and Bell Canada which, among other things, was
resolved in the following manner:
1. Bell and Look providing each other with mutual full and final
releases from any and all current litigation;
2. Look paying Bell $16 million as full and final settlement, to be paid
contemporaneously with the initial $30 million non-refundable payment
from Inukshuk as part of the Agreement. The amount includes
approximately $10 million in trade payables carried by Look plus an
additional $6 million payment;
3. As Look winds down its operations over the course of the next 90
days, Look will pay to Inukshuk all revenues collected from its DSL
Internet subscribers on Bell's network for services provided during
the wind down period net of all applicable taxes in lieu of the
current $360,000 currently paid to Bell on a monthly basis; and
4. All contracts between Bell and Look will end without penalty.
A further condition precedent to the Agreement, required by Rogers, was
that Unique Broadband Systems (TSX Venture: UBS), Look's parent company (with
a 51.8 per cent economic interest in Look), was required to settle its
litigation with Microcell et al. (a Rogers' subsidiary). At the request of
Look, UBS agreed to settle the litigation. UBS will provide the irrevocable
release, and will receive $4 million from Rogers, upon Inukshuk's first
payment of $30 million to Look, when the Final Approval Order is granted by
the Court. The defendants to UBS' action all deny liability and the settlement
is not an admission of any kind.
Note regarding parties named in this release
A number of corporate entities are referenced in this release, either
directly or indirectly. For clarification, references to "the Corporation" or
"Look" are to Look Communications, Inc. References to Unique Broadband Systems
(or UBS) include UBS Wireless Services Inc., a wholly-owned subsidiary of UBS.
UBS is the parent company of Look, with a 51.8 per cent interest in the
Corporation. UBS commenced legal action in 2004 against Allstream Inc. (now
MTS Allstream Inc.), Microcell Telecommunications Inc., Microcell Solutions
Inc. and Inukshuk (wholly-owned subsidiaries of Microcell and now of Rogers
Communications Inc. following its acquisition of Microcell). In 2007 UBS filed
a related claim against the Inukshuk Wireless Partnership, a joint venture
between Rogers and Bell Canada. The settlement of the litigation also includes
MTS Allstream Inc.
About Look Communications Inc.
Look's mission has been to be an M3 - Mobile Multi Media -
communications, entertainment and information service provider in Ontario and
Québec. The Corporation currently delivers a full range of communications
services including high-speed and dial-up Internet access, digital television
distribution, and superior customer service to both the business and
residential markets. The Corporation provides its digital television
distribution and wireless Internet services using its approximately 100 MHz of
Multipoint Distribution System spectrum in the 2.5 to 2.7 GHz frequency band
covering approximately 18 million people (1.8 billion MHz/Pops) in the
provinces of Ontario and Quebec. Look's shares are listed on the TSX Venture
Exchange under the symbols "LOK" for Multiple Voting Shares and "LOK.A" for
Subordinate Voting Shares. Look's website may be found at www.look.ca.
About Unique Broadband Systems, Inc.
UBS is a publicly listed Canadian company that has a 51.8 per cent fully
diluted economic interest in Look Communications Inc. and other assets. With
its licensed spectrum through its subsidiary, Look, UBS is a Canadian digital
television broadcaster and broadband wireless service provider. The Company's
web site may be found at www.uniquebroadband.com.
Caution Regarding Forward-Looking Information
The corporate information contained in this release includes
forward-looking statements regarding future events and the future performance
of Look that involve risks and uncertainties that could cause actual results
to differ materially. Assumptions used in the preparation of such information,
although considered reasonable by Look at the time of preparation, may prove
to be incorrect. The actual results achieved may vary from the information
provided herein and the variations may be material. Consequently, there is no
representation by Look that actual results achieved will be the same in whole
or in part as those forecasts.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
For further information:
For further information: Peter Block, Investor and Media Relations,
firstname.lastname@example.org, (647) 259-3284