Groupe Videotron reacts to the proceedings filed by Cogeco Cable

Business Wire, April 29, 1996

MONTREAL--(BUSINESS WIRE)--April 29, 1996--Le Groupe Videotron ltee reacts to the legal proceedings filed by Cogeco Cable which, simultaneously before two different jurisdictions, the Quebec Superior Court and the Commission des valeurs mobilieres du Quebec, aim at setting aside the deposit agreement of April 19 pursuant to which the principal shareholder of CFCF has agreed to tender its shares under the Groupe Videotron Offer.

Groupe Videotron feels that this move is unfounded and intends to contest these proceedings vigorously, insofar as it is concerned by them.

1. Nothing prevents a majority shareholder from selling its shares and to make undertakings in that respect. There is no judicial precedent negating this right. Cogeco Cable pretends it is the defender of minority shareholders. Groupe Videotron is rather of the opinion that the likely objective sought by Cogeco Cable was, and continues to be, to prevent from occurring a transaction to which it is not a party.

Cogeco Cable is once again ensuring the continuation of this saga. By attempting to delay and obstruct the Groupe Videotron Offer, Cogeco Cable is in fact, once more, harming the CFCF minority shareholders.

2. The proceedings instituted by Cogeco Cable could constitute an abuse of process by a party which has not succeeded in reaching an agreement with either CFCF or the Pouliot family. Obviously, Cogeco Cable continues on a path initiated several months ago:

- The participation of Cogeco Cable in the share capital of CFCF was only established in 1995: Cogeco Cable acquired 1,185,000 shares of CFCF from March to November 1995.

- On Nov. 22, 1995, Cogeco Cable launched its initial public take-over bid for CFCF valued at $18.50 by Cogeco Cable on the basis of $11.50 cash and one Cogeco Cable share. This Offer was varied or extended on numerous occasions even though it was subject to conditions which were impossible to meet.

- This take-over bid was increased by Cogeco Cable on April 9, 1996 to an amount valued at $20.00 by Cogeco Cable - $16.00 cash and half a Cogeco Cable share, containing conditions that are still impossible to meet.

Cogeco Cable thus, has had more than five months to conclude a deal with the Pouliot Family, something it was unable to do.

3. On April 9, Cogeco Cable's President stated that the improved Offer by Cogeco Cable for CFCF shares (representing $16.00 cash and half a Cogeco Cable share - which Offer was valued at $20.00 per share by Cogeco Cable) represented an "excellent value for all CFCF shareholders". He added that $20.00 per share represented the "true value of CFCF".

It is hard to comprehend how Cogeco Cable can now accuse the principal shareholder of CFCF of being unreasonable because it accepted on April 19 to be bound by a $21.50 cash offer.

The Groupe Videotron Offer improved the April 9 Cogeco Cable Offer by an additional amount of at least 93 million dollars. When the Pouliot family accepted to sell its shares to Groupe Videotron, five months after the asset swap agreement of Nov. 18, 1995, it therefore accepted the highest Offer, which Offer contrary to Cogeco Cable's Offer, is payable entirely in cash.

Claude Chagnon reiterates that the Groupe Videotron Offer is fair and attractive for all CFCF shareholders. He therefore invites shareholders to tender their shares in the Groupe Videotron Offer; these shares will then be paid within three days from the expiry of the Offer which is scheduled to expire on May 14, 1996.

Le Groupe Videotron ltee is an international telecommunications company which is active in cable television, telephone services and interactive multimedia services. The company has several subsidiaries active in Canada, mainly in cable television and television broadcasting.

It develops and operates cable television and telephone markets in England and private cable television in the United States. Its technological know-how and experience acquired with the Videoway multimedia system enables it to play a leading role in the development of the information highway.

CONTACT: Roch Landriault, 514/843-2345