Canada's Rogers Wireless to Buy Microcell

NEW YORK - Rogers Wireless Communications Inc. said Monday it has agreed to acquire rival Canadian cell-phone carrier Microcell Telecommunications Inc., which had been fending off a hostile suitor.

Rogers of Toronto offered to pay 1.4 billion Canadian dollars ($1.08 billion) for Microcell, the smallest of Canada's four wireless companies. Under terms of the deal, Rogers will pay 35 Canadian dollars ($27) for each Microcell share.

The offer is higher than an unsolicited bid from Vancouver-based Telus Corp., which Microcell's board has been fighting since May. Telus, Canada's second-biggest phone company, offered to pay 29 Canadian dollars ($22) for each Microcell share, or about 1.1 billion Canadian dollars ($848 million.)

Telus's offer was set to expire Monday.

Rogers said the board of Microcell had approved its offer and would recommend it to Microcell shareholders. The two companies expect the transaction to close before the end of the year, subject to shareholder and regulatory approval.

Microcell, which is based in Montreal, has 1.2 million subscribers. The combination would make Rogers Wireless, a unit of Rogers Communications Inc., the largest cell-phone provider in Canada with more than 5.1 million customers, the companies said.

Rogers Wireless plans to finance the purchase through cash on hand, drawdown of its 700 million Canadian dollar ($539 million) bank-credit facility and through a bridge loan of up to 900 million Canadian dollars ($694 million) from its parent company. Rogers Communications will fund the bridge loan through cash on hand and drawdown of credit facilities at its other subsidiaries.

The Rogers Wireless offer is subject to regulatory approvals and other customary conditions, including a requirement that two-thirds of the shares be tendered.

Under certain circumstances, a fee of 45 million Canadian dollars ($35 million) is payable by Microcell to Rogers Wireless, including if a superior proposal is recommended by the board of Microcell.

Class B shares of Rogers Wireless finished at $29.67 Monday, down 8 cents, on the New York Stock Exchange.