AT&T Canada Announces Agreement to Make a Take-over Bid for All of the Outstanding Common Shares of Tigertel Inc - from Applied Digital Solutions Inc - Company Business and Marketing

Cambridge Telcom Report, Dec 6, 1999

AT&T Canada, Canada's largest and only national facilities-based competitive provider of local and long distance, voice, data and Internet communications services, Monday announced that it has entered into an agreement with TigerTel Inc. (CDN:TTEL) pursuant to which AT&T Canada Corp. has agreed, subject to the satisfaction of certain conditions, to make an all cash take-over bid for 100 percent of TigerTel's common shares at a price of $9.25 per share.

Upon the unanimous recommendation of a special committee of the board of directors, the board of directors of TigerTel has unanimously agreed to support the bid and recommend it to the holders of common shares.

AT&T Canada has also entered into an agreement with Applied Digital Solutions, Inc., the controlling shareholder of TigerTel and the holder of 4,942,284 common shares of TigerTel, (representing approximately 65 percent of the outstanding common shares on a fully diluted basis) pursuant to which Applied has agreed to deposit its common shares of TigerTel under the bid once it is made.

Based on the 7,506,297 common shares outstanding on a fully diluted basis as at November 24, 1999, the total value of the bid is approximately $69.4 million.

TigerTel is a Canadian business telecommunications provider that derives the bulk of its revenue from managing telecommunications services by outsourcing the planning, administration and support of telecommunications services on behalf of large business customers. In addition, the company offers telecommunications services to business customers on a resale basis and operates 13 call centres across Canada which provide a variety of outsourced tele-sales and tele-service offerings on behalf of business customers.

TigerTel has approximately 15,000 business customers and 500 employees across Canada. TigerTel is expected to generate approximately $50 million in revenue in 1999 and be approximately EBITDA neutral. The transaction is expected to close before the end of this year, subject to all conditions being satisfied.

"We're extremely pleased to announce this agreement," said Jim Meenan, Vice-Chairman and CEO, AT&T Canada. "TigerTel has built a strong business customer base by offering products and services that complement those that we offer today. We expect to leverage our local and long haul fibre-optic networks by migrating a significant portion of their resale traffic onto our own networks. We also expect TigerTel to enhance our significant, existing managed network services capabilities."

"We look forward to the opportunity to join the AT&T Canada team," said Don Swift, CEO of TigerTel. "We're confident that our team will contribute to the significant growth opportunities within the Canadian business telecommunications market. We bring a talented group of employees and a unique set of services within the business market."

The bid will be subject to a number of conditions customary for a transaction of this type and certain additional conditions that are required to be satisfied prior to the payment for common shares tendered.

These conditions include, but are not limited to, at least 90 percent of the outstanding common shares of TigerTel being tendered to the bid, receipt of Competition Act approval, approval of a special resolution of the holders of exchangeable shares of TigerTel's subsidiary, TigerTel Services Limited, to amend the terms of such shares providing for their early redemption and the sale by TigerTel Services Limited to Applied Digital Solutions, Inc. of its direct and indirect interest in Consolidated Technologies Holdings Inc. and its subsidiaries.

In the event of the termination of the agreement between AT&T Canada and TigerTel, under certain circumstances, AT&T Canada would be entitled to a termination fee of approximately $3.5 million. These circumstances include TigerTel's board withdrawing or modifying its approval of the transaction or Tigertel's board approving or recommending a transaction which it determines is superior to the AT&T Canada transaction.

AT&T Canada is Canada's largest facilities-based competitive voice, data and Internet telecommunications provider. Created in June 1999 from the merger of AT&T Canada Long Distance Services, MetroNet Communications, Netcom Canada and ACC TelEnterprises, AT&T Canada brings together the country's largest competitive local exchange carrier (CLEC), three of Canada's leading competitive Internet Service Providers (ISP), and Canada's pioneer in competitive long distance. Deploying the most advanced fibre-optic networking and digital switching platforms, AT&T Canada offers customers across the country a full suite of local and long distance voice, data and Internet services - with excellent customer service, competitive pricing, and sales and service locations from coast-to-coast. AT&T Canada is a public company which trades on the Toronto and Montreal stock exchanges under the symbol TEL.B and on the NASDAQ National Market System under the symbol ATTC. Visit AT&T Canada's web site, www.attcanada.com, for more information about the company.