[Letterhead of]
CRAVATH SWAINE & MOORE LLP
[New York Office]
December 21, 2004
Rogers Wireless Communications Inc.
Schedule TO-T/Schedule 13E-3 filed on November 26, 2004 by
Rogers Communications Inc., RWCI Acquisition
Inc. and Rogers Wireless Communications Inc.
File No. 5-61893
Dear Ms. Chalk:
On behalf of Rogers Communications Inc., a British Columbia corporation
("RCI"), RWCI Acquisition Inc. ("RWCIAI"), a British Columbia corporation and
a wholly owned subsidiary of RCI, and Rogers Wireless Communications Inc., a
Canadian corporation ("RWCI"), this letter supplements our prior response in
our letter dated December 15, 2004 (the "December 15 Letter"). This letter
responds to your prior comments dated December 9, 2004 (the "Comment Letter"),
providing comments on RCI's, RWCIAI's and RWCI's Schedule TO-T/Schedule 13E-3
filed on November 26, 2004 (as amended on December 15, 2004, the "Schedule
TO/13E-3") and our discussions on December 17, 2004 regarding the responses in
the December 15 Letter. For your convenience, each comment from the Comment
Letter discussed on December 17, 2004 has been reproduced below, followed by
RCI's, RWCIAI's and RWCI's supplemental response to such comment. Capitalized
terms defined in the Schedule TO/13E-3 and used in the following responses
without definition have the meanings specified in the Schedule TO/13E-3.
OFFER TO PURCHASE--SUMMARY TERM SHEET
2. SINCE THIS A GOING PRIVATE TRANSACTION, THE SUMMARY TERM SHEET SECTION
SHOULD ADDRESS THE OPINION OF ROGERS, RWCI COMMUNICATIONS AND CORPORATION AS
TO THE FAIRNESS OF THIS TRANSACTION TO UNAFFILIATED SHAREHOLDERS OF
CORPORATION.
SUPPLEMENTAL RESPONSE
2
RCI, RWCIAI and RWCI (collectively, "Rogers") has revised the disclosure
on page four of the Offer to Purchase to clarify that RCI's board of directors
and RWCIAI's board of directors determined that the Offer is fair and
reasonable to Shareholders (other than RCI and its affiliates) as follows:
The following question and answer is hereby added immediately after the
question and answer "WHAT DOES THE CORPORATION'S BOARD OF DIRECTORS THINK OF
THE OFFER?" on page four of the Offer to Purchase:
"WHAT DO THE OFFERORS THINK OF THE OFFER?
The boards of directors of RCI and RCI Subco have each concluded that the
offer is fair, from a financial point of view, to shareholders (other
than RCI and its affiliates)."
CIRCULAR-SPECIAL FACTORS-BACKGROUND TO THE OFFER, PAGE 31
16. BRIEFLY EXPLAIN THE DIFFERENCE BETWEEN A "SUBSTANTIAL ISSUER BID" AND
"INSIDER BID."
SUPPLEMENTAL RESPONSE
Rogers has revised the disclosure in the fourth full paragraph on page 32
of the Circular and the first full paragraph on page 33 of the Circular to
address the Staff's comment, as follows:
The fourth full paragraph on page 32 of the Circular is hereby amended and
restated in its entirety as follows:
"At the request of RCI, on September 27, 2004, the Corporation
constituted the Independent Committee with a mandate to, among other
things, retain an investment advisor independent of RCI and its
affiliates to prepare a formal valuation of the RWCI Restricted Voting
Shares in accordance with Rule 61-501, Policy Q-27 and the Shareholder
Protection Agreement. In order for the Corporation to be able to make a
decision whether to proceed with a possible substantial issuer bid (an
offer by an issuer to acquire its own shares, in this case, an offer by
the Corporation to acquire RWCI Restricted Voting Shares) to purchase
RWCI Restricted Voting Shares, it was necessary for the Corporation to
determine the value of the RWCI Restricted Voting Shares pursuant to a
formal valuation prepared by an independent valuator. See "Shareholder
Protection Agreement - Issuer Bids" in Schedule "B" hereto. Such a
valuation was required under the terms of the Shareholder Protection
Agreement. A
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substantial issuer bid was being considered as a possibility
because it could serve as a mechanism to permit funds to be transferred
from the Corporation to RCI in order to permit RCI to repay financing in
the amount of approximately $1,750 million to be incurred by RCI to
complete the purchase of AT&T Wireless' stake in the Corporation. If such
a substantial issuer bid was made, RCI would have had the opportunity to
tender the shares of the Corporation acquired from AT&T Wireless to that
bid. The substantial issuer bid would also have been made to public
shareholders of the Corporation. No decision was ever made as to the
possible terms of any such substantial issuer bid."
The first full paragraph on page 33 of the Circular is hereby amended and
restated in its entirety as follows:
"On November 9, 2004, upon receipt of the preliminary valuation range,
management of RCI concluded that rather than a substantial issuer bid, it
could recommend to the RCI board of directors an insider bid (an offer by
a holder of voting securities carrying more than 10% of the total votes
of an issuer to acquire shares of such issuer, in this case, an offer
made by RCI or a subsidiary of RCI to acquire RWCI Restricted Voting
Shares) by RCI as a first step to potentially taking the Corporation
private at a price that was in the best interests of RCI's own
shareholders and that could be fair from a financial point of view to
Minority Shareholders. See "Shareholder Protection Agreement - Insider
Bids" in Schedule "B" hereto. As a result, at a meeting held on November
10, 2004, representatives of Scotia Capital presented financial
information and advice to the finance committee of the board of directors
of RCI. Scotia Capital was not requested to, and did not provide any
report or opinion as to the value of the Corporation, RCI, the RWCI
Restricted Voting Shares or the RCI Non-Voting Shares. Scotia Capital was
not requested to, and did not, evaluate or render an opinion as to the
fairness, from a financial point of view, of the consideration proposed
to be paid under the Offer to Minority Shareholders. Following Scotia
Capital's presentation, management of RCI recommended to the finance
committee of the board of directors of RCI that RCI make the Offer."
RECOMMENDATIONS OF THE INDEPENDENT COMMITTEE AND BOARD OF DIRECTORS OF THE
CORPORATION - GENERAL
18. REVISE TO ADDRESS BOTH PROCEDURAL AND SUBSTANTIVE FAIRNESS TO UNAFFILIATED
SHAREHOLDERS. WITH RESPECT TO PROCESS, EXPLAIN WHY THE CORPORATION BELIEVES
THE TRANSACTION IS FAIR IN THE ABSENCE OF THE PROCEDURAL SAFEGUARDS SET FORTH
IN ITEM 1014(C), (D) AND (E) OF REGULATION M-A.
SUPPLEMENTAL RESPONSE
4
The Corporation believes that the terms of the Shareholder Protection
Agreement, which requires, among other things, that a formal valuation of RWCI
be prepared by an independent valuer, that the consideration offered per share
to holders of RWCI Restricted Voting Shares will not be less than 66 2/3% of
the value (or of the midpoint of the range of values) arrived at in the formal
valuation and that a committee of independent directors of RWCI select the
independent valuer, review the independent valuer's report and report its
recommendations to the RWCI board of directors provides adequate procedural
fairness for the Minority Shareholders. Rogers has amended the disclosure on
page 36 of the Circular as follows:
Page 36 of the Circular is hereby amended by amending and restating in its
the entirety the paragraph under the heading "Other" thereon as follows:
"Other
The Corporation believes that the terms of the Shareholder
Protection Agreement, which requires, among other things, that a formal
valuation of RWCI be prepared by an independent valuer, that the
consideration offered per share to holders of RWCI Restricted Voting
Shares will not be less than 66 2/3% of the value (or of the midpoint of
the range of values) arrived at in the formal valuation and that a
committee of independent directors of RWCI select the independent valuer,
review the independent valuer's report and report its recommendations to
the RWCI board of directors provides adequate procedural fairness for the
Minority Shareholders. The Offer does not require the approval of a
majority of the Minority Shareholders. The Offerors intend to take-up and
pay for any and all RWCI Restricted Voting Shares deposited in the Offer,
subject to satisfaction or waiver of certain conditions. See Section 4 of
the Offer to Purchase, "Conditions of the Offer."
19. ORDINARILY, THE FACTORS LISTED IN INSTRUCTION 2 TO ITEM 1014 OF REGULATION
M-A ARE RELEVANT IN ASSESSING THE FAIRNESS OF THE CONSIDERATION TO BE RECEIVED
BY UNAFFILIATED SHAREHOLDERS. TO THE EXTENT THAT ONE OR MORE OF SUCH FACTORS
WAS NOT CONSIDERED OR WAS CONSIDERED BUT GIVEN LITTLE WEIGHT IN THE CONTEXT OF
YOUR PARTICULAR TRANSACTION, YOU SHOULD EXPLAIN WHY. SEE EXCHANGE ACT RELEASE
17719 (APRIL 13, 1981). PLEASE EXPAND TO PROVIDE EACH FILING PERSON'S ANALYSIS
OF THESE FACTORS, OR TO EXPLAIN WHY ANY ONE OR MORE WERE NOT CONSIDERED.
As indicated on pages 33 and 34 of the Circular, the RCI board of
directors made a determination that the Offer is fair, from a financial point
of view, to the Minority Shareholders. This disclosure also lists the
rationale for that determination, including the RCI board of directors'
consideration of the preliminary valuation range presented by BMO Nesbitt
Burns to the RWCI Independent Committee, (1) the values of entities in RWCI's
peer group prepared by Scotia Capital, (2) the current and historical market
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prices for the RWCI Restricted Voting Shares (and the premium offered in the
Offer) (factors (i) and (ii) of Instruction 2 to Item 1014 of Regulation M-A),
the going concern value of RWCI (as analyzed in the preliminary BMO Nesbitt
Burns presentation to the RWCI Independent Committee) (factor (iv) of
Instruction 2 to Item 1014 of Regulation M-A) and the purchase prices paid in
previous purchases (factor (vi) of Instruction 2 to Item 1014 of Regulation
M-A). In addition, following receipt of the BMO Nesbitt Burns Valuation and
Fairness Opinion to the RWCI Independent Committee (factor (vii) of
Instruction 2 to Item 1014 of Regulation M-A) on November 22, 2004, the
executive committee of the RCI board of directors (which was delegated the
authority to make a final determination regarding the Offer) reaffirmed its
view that the Offer is fair, from a financial point of view, to the Minority
Shareholders. The RCI board of directors did not consider the net book value
(factor (iii) of Instruction 2 to Item 1014 of Regulation M-A) or liquidation
value (factor (v) of Instruction 2 to Item 1014 of Regulation M-A) in
considering the fairness of the Offer from a financial point of view as BMO
Nesbitt Burns had determined that these yielded lower values than the going
concern approach. Factor (viii) is inapplicable to RWCI. On November 22,
2004, the RWCIAI board of directors made the same determination of fairness,
in reliance on the analysis of the RCI board of directors. Rogers has amended
the disclosure on page 33 of the Circular as follows:
Page 33 of the Circular is hereby amended by adding the following to the
end of the last full paragraph thereon:
"In making its determination regarding the fairness, from a financial
point of view, to the Minority Shareholders, the RCI board considered a
variety of factors, including, the preliminary valuation range presented
by BMO Nesbitt Burns to the RWCI Independent Committee, the values of
entities in RWCI's peer group prepared by Scotia Capital, the current
and historical market prices for the RWCI Restricted Voting Shares (and
the premium offered in the Offer), the going concern value of RWCI (as
analyzed in the preliminary BMO Nesbitt Burns presentation to the RWCI
Independent Committee and the final Valuation and Fairness Opinion), the
purchase prices paid by RCI in previous purchases and the Valuation and
Fairness Opinion. The RCI board of directors did not consider the net
book value or liquidation value in considering the fairness of the Offer
from a financial point of view as BMO Nesbitt Burns had determined that
these valuation approaches yielded lower values than the going concern
approach. On November 22, 2004, the RWCIAI board of directors made the
same determination of fairness, in reliance on the determination made by
the RCI board of directors."
20. WITH RESPECT TO THE BOARD OF DIRECTORS OF THE CORPORATION, IF IT SEEKS TO
RELY ON THE ANALYSES OF THE INDEPENDENT COMMITTEE AND THE FAIRNESS ADVISOR IN
TAKING A POSITION ON THE FAIRNESS OF THE OFFER, THE BOARD MUST EXPRESSLY ADOPT
6
THE ANALYSES AND CONCLUSIONS OF EACH PARTY. OTHERWISE, DETAIL THE ANALYSES
PERFORMED BY THE BOARD AND HOW THEY LED TO ITS RECOMMENDATION WITH RESPECT TO
THE OFFER.
SUPPLEMENTAL RESPONSE
Rogers has revised the disclosure on page 38 of the Circular clarify that
after the Independent Committee reported its conclusions and recommendations
and presented the Valuation and Fairness Opinion to the Board of Directors on
November 22, 2004, the Board of Directors discussed those factors the
Independent Committee considered relevant in determining whether the Offer was
in the best interest of Minority Shareholders, but it did not rely exclusively
on those factors and did not expressly adopt the analyses and conclusions
contained therein. Instead, as indicated on page 38 of the Circular, the RWCI
directors considered a broad range of factors and did not assign any relative
or specific weights to such factors. The Board of Directors did, however,
accept those conclusions and analyses. The disclosure has been revised to
address the Staff's comment, as follows:
The following paragraph is hereby added immediately before the last
paragraph on page 38 of the Circular:
"After receiving the report of the Independent Committee and its
conclusions and recommendations, the Board of Directors discussed those
factors the Independent Committee considered relevant in determining
whether the Offer was in the best interest of Minority Shareholders,
including those factors listed under "INDEPENDENT COMMITTEE OF THE
CORPORATION --Deliberations and Recommendation of the Independent
Committee" and the Board of Directors considered those factors in
determining whether the Offer was in the best interest of Minority
Shareholders. The Board of Directors accepted the conclusions and
analyses presented in the report of the Independent Committee and the
Valuation and Fairness Opinion"
SCOTIA CAPITAL PRESENTATION, PAGE 41
25. Please address the comments above under "BMO Nesbitt Burns" as to Scotia
Capital, as applicable.
SUPPLEMENTAL RESPONSE
Rogers confirms to the Staff that Scotia Capital did not receive any
non-public financial forecasts or projections or any other non-public
information that would be material to shareholders.
RECENT DEVELOPMENTS, PAGE A-4
In addition to the above amendments, Rogers has revised the disclosure on
page A-4 of Schedule "A" to disclose that on December 17, 2004, the board of
directors of
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RWCI approved a loan of up to $1.4 billion from RWCI to RCI. The
loan to RCI will be advanced on December 31, 2004 and will mature on October
16, 2006. The disclosure has been revised, as follows:
The following paragraph is hereby added immediately before the heading
"Auditors, Transfer Agent and Registrar" on page A-4 of Schedule "A":
"RWCI Loan to RCI
On December 17, 2004, the Corporation and RCI announced that the
board of directors of the Corporation had approved a loan of up to $1.4
billion from the Corporation to RCI. The loan will be made from cash on
hand resulting from a return of capital from RWI. RCI's intent is to use
the proceeds from this loan along with $350 million cash on hand to repay
its bridge credit facility. The loan to RCI will be advanced on December
31, 2004 and will mature on October 16, 2006. The Corporation continues
to review the various methods and timing of effecting a distribution of
$1.75 billion to its shareholders."
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If you have any questions regarding the contents of this letter,
please contact me at the above number.
Respectfully,
/s/ John T. Gaffney
John T. Gaffney
Christina Chalk, Esq.
Office of Mergers and Acquisitions
Division of Corporate Finance
United States Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549