Offer to purchase CLEARNET.pdf - About TELUS

TELUS intends to integrate Clearnet with its existing mobile wireless business and operate them
nationwide. TELUS further intends Clearnet to continue to build out its Mike iDEN network in Canada to the
extent economically feasible and to increase its population coverage by four million by the end of 2003. Given
the compatibility in technology (TELUS and Clearnet both use CDMA technology for their PCS networks), and
the complementarity of geography in which TELUS and Clearnet currently provide mobile wireless services,
TELUS expects the business of Clearnet to complement its existing mobile wireless business.
The integration is expected to enhance TELUS’ ability to (i) offer bundled or packaged wireless and
wireline telecommunications services on a national basis, thereby increasing customer choice, (ii) develop
and sell new applications, such as data and Internet, for wireless services and develop future technologies, and
(iii) achieve economies of scale, thereby reducing capital and operating expenditures.
In addition, TELUS management has identified significant operating synergies and tax synergies. The
operating synergies include the elimination of overlapping branding and advertising expenses, conversion of
roaming traffic to each other’s networks, increasing efficiency in network operations and rationalization of
corporate and back-office expenses.
If TELUS is successful and acquires control of Clearnet as a result thereof, it is further expected that
certain changes will be effected with respect to the composition of the board of directors of Clearnet to allow
nominees of TELUS to become members of the board of directors of Clearnet. In addition TELUS and
Clearnet may, subject to Clearnet’s agreement, effect an internal reorganization prior to the Take-up Date in
order to realize certain efficiencies. See ‘‘Background to the Offers — Support Agreement’’.
TELUS intends to liquidate Clearnet into, or amalgamate Clearnet with one or more affiliates of TELUS or
to otherwise combine the business operations of Clearnet and TELUS to achieve the objectives set out above.
If permitted by applicable law, subject to the completion of the Offers, if all of the issued and outstanding
Clearnet Shares are acquired as a result of the Offers, a Compulsory Acquisition or a Subsequent Acquisition
Transaction, if any, the Offerors intend to delist the Clearnet Non-Voting Shares from the TSE and NASDAQ.
See ‘‘Price Range and Trading Summary of Clearnet Non-Voting Shares’’.
SOURCE OF FUNDS
TELUS has entered into the Commitment Letter for the provision of senior credit facilities in an aggregate
amount of up to $7.7 billion through The Toronto-Dominion Bank and Morgan Guaranty Trust Company of
New York (collectively the ‘‘Banks’’). The credit facilities (the ‘‘Credit Facilities’’) will be available in three
tranches, in the amounts of $5 billion (‘‘Tranche A’’), $1.25 billion (‘‘Tranche B’’) and $1.45 billion
(‘‘Tranche C’’), respectively. The purposes of the Credit Facilities will be to finance the Offers, finance existing
and acquired indebtedness and to provide funds which may be required to make the required offers to purchase
outstanding notes of Clearnet. The Banks have committed to fully underwrite the Credit Facilities and will act as
agents in a planned syndication of a portion of the commitment to a group of financial institutions. Tranche A
will be comprised of a 364 day non-revolving bridge facility, Tranche B will be comprised of a 364 day revolving
line of credit and Tranche C will be comprised of a 364 day non-revolving liquidity backstop facility. Security for
repayment of the Credit Facilities includes the pledge of certain shares of specified subsidiaries of TELUS,
including those of Acquisition Co.; the assignment of demand intercompany loans made by TELUS to effect the
Offers; the assignment of any secured or unsecured intercompany debt owed by Clearnet to TELUS; and the
unlimited joint and several guarantees of certain specified subsidiaries of TELUS and Acquisition Co. TELUS
has agreed, pursuant to a fee letter with the Banks, to pay an underwriting and structure fee equal to 1.5% of
Tranche A and B and 0.25% on Tranche C, 35% of which was paid on signing the Committment Letter and the
balance to be paid on the Take-up Date. In addition TELUS will pay an amount equal to 2.25% of any amount
drawn down under Tranche C from time to time. TELUS will be obligated to pay an annual agency fee to be
negotiated.
34