Manitoba Telecom Services (MTS) will acquire Allstream (formerly AT&T Canada) in a transaction valued at $1.7 billion. Allstream offers a broad portfolio of business solutions including data and voice connectivity, infrastructure management and information technology services. It currently holds an 11% share of the Canadian business telecommunications market. MTS is the incumbent operator in Manitoba.
Under the deal, MTS will acquire all of the outstanding shares of Allstream at an offering price per Allstream share of $23.00 in cash plus 1.0909 MTS shares. The offer equates to a price of $81.12 per Allstream share, based on the closing price per MTS share on 17-March-2004. The offer represents a premium of approximately 19% for Allstream shareholders.
BCE (the parent company of Bell Canada ), which is the largest shareholder in Manitoba Telecom and holds a 22% stake, issued a brief statement calling the deal “a significant change in the strategic direction of MTS,” and saying it’s weighing its options. http://www.allstream.comhttp://www.mts.ca
- Allstream operates a network with 14,000 km of intercity fiber and 4,700 km of intracity fiber. It has 29 CLEC networks with 537,940 access lines in service. Its network also encompasses 14 local voice switches, 109 Frame Relay switches and 695 ATM switches.