Groupe Videotron Notified That Pacific Telesis Abandons US $170 Million Deal

Business Wire, Nov 13, 1996

MONTREAL--(BUSINESS WIRE)--Nov. 13, 1996--LE GROUPE VIDEOTRON (ME,TSE:VDO) Le Groupe Videotron ltee reported today that it had received a notice from Pacific Telesis Group purporting to terminate the proposed US $170 million purchase of Groupe Videotron's wireless cable interests (MMDS) in the U.S.

Under an agreement of Nov. 9, 1995, Pacific Telesis agreed to purchase all of the stock of Wireless Holdings, Inc. (WHI) and Videotron (Bay Area), Inc. (VBAI) which own wireless cable rights and certain operating wireless cable systems in various West Coast cities and in Tampa, Florida and Greenville, South Carolina. Groupe Videotron indirectly owns 50 percent of WHI and 80 percent of VBAI and holds indebtedness of the two companies aggregating approximately US $50 million. Groupe Videotron anticipated receiving in excess of US $110 million as its share of the proceeds of the proposed sale.

Groupe Videotron stated that the agreement with Pacific Telesis has a provision allowing for the termination by any of the parties after Nov. 9, 1996 if closing has not occurred, providing the terminating party has complied with all of its obligations under the agreement. Groupe Videotron also said that the parties are already engaged in an arbitration proceeding in which, among other things, Groupe Videotron is contesting Pacific Telesis's right to exercise the termination provision at this time.

Le Groupe Videotron ltee is an international telecommunications company which is active in cable television, telephone services and interactive multimedia services. Its Company has subsidiaries in Canada, mainly in cable television and television broadcasting. It develops and operates 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: Le Groupe Videotron Ltee

Sylvia Morin, 514/985-8573

514/985-8425 (FAX)