Vidéotron Acquired by Quebecor Media

The final installment in the continuing saga of Rogers Communications Inc. (Rogers), Le Groupe Vidéotron Ltée (Vidéotron), Shaw Communications Inc. (Shaw), the Caisse de dépôt et placement du Québec (Caisse) and Quebecor Inc. (Quebecor) occurred on October 27, 2000 with the acceptance of a $5.4 billion offer to acquire all outstanding shares of Vidéotron made by Quebecor Media (Media), a company jointly owned by Quebecor and the Caisse. This takeover occured pursuant to an offer from Media on September 27, 2000, replacing a previous offer made August 21, 2000, providing for the payment of $45 per share cash and targeting all of Vidéotron multiple voting shares and subordinate voting shares. The new offer was conditional on the acquisition of 662/3 per cent of all of the multiple voting shares and of 662/3 per cent of all the subordinate voting shares on a fully-diluted basis.

Concurrent with this acquisition, Media proposed to acquire from various subsidiaries of Quebecor communication assets that the parties valued at approximately $2.3 billion, including Quebecor’s investments in nurun Inc., Sun Media Corp., Groupe Archimbault, the Internet portal Canoe/Canoe and all of the assets related to the publication of books, magazines and alternative newspapers (excluding TQS inc. and certain minor assets).

On October 19, 2000, the date on which the new offer was set to expire, Quebecor Inc. announced that all the conditions of Media’s offer had been met, and that it was prepared to take up and pay for the Vidéotron shares on October 23, 2000. Under the terms of the offer, 63,064,571 subordinate voting shares and 50,249,844 multiple voting shares, representing 100 per cent of multiple voting shares and 94.88 per cent of subordinate voting shares, were deposited. These shares include Vidéotron shares that were held by the Chagnon family (who held a 72 per cent control block of Vidéotron) and by the Caisse, Quebec’s public pension-fund manager that owned a 17 per cent stake in Vidéotron.

This acquisition concluded a series of transactions reported on in the March 2000 and May 2000 issues of Lexpert, namely:
1. Rogers’ February 7, 2000 announcement that it planned to acquire Vidéotron in a $5.6 billion share swap;
2. Rogers’ March 23, 2000 announcement of a wide-ranging series of agreements with Shaw pursuant to which they agreed to a major swap of cable assets and the creation of strategic Internet alliances;
3. An interim injunction granted to the Caisse on March 24, 2000, preventing the Chagnon family from approving a Rogers and Vidéotron merger;
4. A preliminary $5.9 billion offer made on March 31, 2000 by Quebecor and the Caisse to shareholders of Vidéotron.

Vidéotron’s acquiescence to the originally unsolicited Quebecor offer ended one of Canada’s most hotly-contested takeover battles. The acquisition of Vidéotron extends Quebecor’s reach into Quebec’s cable TV market and adds to its multimedia empire which already includes newspapers such as the Toronto Sun, the popular Canoe Inc. Internet portal and Quebec television stations.

Counsel for the parties to the successful bid (Qubecor, Caisse and Vidéotron) were as follows: For the Caisse: in-house General Counsel Claude Bergeron, with the assistance of a team from Goodman Phillips & Vineberg that included Sylvain Cossette and Jonathan Lampe (corporate/securities), Robert Mongeon, William Brock, Louis-Martin O’Neill and Marc-André Boutin (litigation), Robert Raizenne, Brian Bloom and Marie-Emmanuelle Vaillancourt (tax) and Michael Koch (CRTC). For Quebecor: a team from Ogilvy Renault led by Marc Lacourcière (corporate/securities) and consisting of Dominique Fortin, Terry Dobbin, Ava Yaskiel, Steve Malas, Sol Sananes, Manon Guesthier, Michelle Setlakwe and Felix Duval (corporate/securities), Andrew Fleming, Robert Borduas, Jane Bogaty and Martin Thériault (banking), Jules Charette (tax) and Denis Gascon (competition). For Vidéotron: a team from McCarthy Tétrault consisting of Benjamin Silver, Patrick Boucher and Raphaelle Lapierre (securities) and Warren Goodman (corporate/ commercial).


Félix Duval Martin Thériault Aidan J. Meade Solomon Sananes Terence S. Dobbin Ava G. Yaskiel Denis Gascon Warren M. Goodman Brian Bloom Marc-André Boutin Sylvain Cossette Jane Bogaty Jules Charette Dominique Fortin Robert Mongeon Steve Malas Robert G. Borduas William Brock Andrew Fleming Jonathan Lampe Marie-Emmanuelle Vaillancourt Robert Raizenne Benjamin Silver Michael S. Koch Louis-Martin O'Neill Marc Lacourcière Patrick Boucher Raphaëlle Lapierre


Davies Ward Phillips & Vineberg LLP Norton Rose Fulbright Canada LLP