Vancouver, Canada / New York, USA – TELUS Corporation (TSX: T, T.NV; NYSE: TU) is announcing the public secondary offering of Verizon Communications Inc.'s entire equity interest in TELUS. TELUS has filed a preliminary prospectus with securities regulators in Canada and the United States in order to qualify the secondary distribution (the Offering) of 48.55 million TELUS Common Shares (25.1% of outstanding Common Shares) and 24.94 million TELUS Non-Voting Shares (15.1% of outstanding Non-Voting Shares), representing a combined 20.5% equity interest, owned by Verizon Canada Holdings Corporation, an indirect wholly owned subsidiary of Verizon Communications Inc.
Pursuant to the Long-Term Relationship Agreement between the companies, Verizon is prohibited from selling its interest in TELUS to below 19.9% without the approval of the independent directors of TELUS. On November 30, 2004 TELUS and Verizon entered into an agreement pursuant to which TELUS' Independent Directors agreed to accommodate the sale on certain conditions set out in that agreement. Under that agreement Verizon has paid TELUS U.S.$125 million (approximately Cdn $148.5 million), which is non refundable except in certain limited circumstances.
The companies will continue their business relationship with certain adjustments to reflect changes in their business requirements since the alliance was first established. The Amended and Restated Software and Related Technology and Services Agreement contains key provisions including: TELUS will have exclusive rights in Canada to Verizon trademarks, and software and technology acquired prior to the closing of the Verizon sale of its interest in TELUS, but not any other Verizon trademarks or software and technology and certain purchasing rights; corresponding reduction in annual fees payable by TELUS from U.S. $82 million to U.S. $4 for years 2005 to 2008; Verizon is required to continue to provide upgrade and support on the software and technology licensed to TELUS; the two companies remain committed to use each other's cross-border services where capabilities and customer requirements permit; TELUS is released from its obligation not to compete in the U.S.; and the agreement has been renewed for 2005 and will be extended to December 31, 2008.
Verizon indicated that it desires to divest the TELUS investment as part of its ongoing strategy of divesting selected international investments while it focuses on core business growth opportunities such as broadband and wireless.
In accordance with its announcement made in October, 2004, TELUS intends to file, following this announcement of the Offering and subject to regulatory approval, a notice of intention to commence a normal course issuer bid to purchase up to 25.5 million of its issued and outstanding shares (14 million Common Shares and 11.5 million Non-Voting Shares) over a one year period.
The lead underwriters for the share offering are Merrill Lynch, Morgan Stanley & Co. Incorporated and RBC Capital Markets.
It is expected that the closing of the Offering will occur on or about December 14, 2004, or such other date as may be agreed upon, but in any event not later than December 31, 2004.
TELUS is not selling any newly issued securities as part of the Offering and will not receive any of the proceeds of the Offering.
A registration statement relating to these securities has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This communication shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of securities in any jurisdiction in which the offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Copies of a prospectus relating to the offering may be obtained from Merrill Lynch (in Canada at 416-369-7400 or in the U.S. at 212-449-1000), Morgan Stanley & Co. Incorporated (in the U.S. at 212-761-4000 or in Canada at 416-943-8567) or RBC Capital Markets (in Canada at 416-842-7588 or in the U.S. 612-371-2818). See addresses below.
This news release contains forward-looking statements. Forward-looking statements are not based on historical facts, but rather on current expectations and projections about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. These risk factors are listed from time to time in TELUS' and Verizon's reports, comprehensive public disclosure documents including the Annual Information Form, and in other filings with securities commissions in Canada and the United States.
Merrill Lynch - call the Prospectus Department, in U.S. at (212) 449-1000 or in Canada at (416) 369-7400; in U.S., write to Merrill Lynch, Pierce, Fenner & Smith Inc., 4 World Financial Center, FL 05, New York, NY 10080; in Canada, write to Merrill Lynch Canada Inc., 181 Bay Street, Suite 400, Toronto, Ontario M4T 2A9.
Morgan Stanley & Co. Incorporated - in U.S., call (212) 761-4000, or write to Attn: Prospectus Department, Morgan Stanley, 1585 Broadway, New York, NY 10036; in Canada, call (416) 943-8567, or write to Morgan Stanley Canada Limited, 181 Bay Street, Suite 3700, Toronto, Ontario M5J 2T3.
RBC Capital Markets - in Canada, call (416) 842-7588; in U.S., call (612) 371-2818, or write to Syndicate Department, Dain Rauscher Plaza 60 S, 6th Street, Minneapolis, MN 55402.
For more information, please contact:
TELUS Investor Relations contact: