Mr. Patrice Ouimet reports

CDPQ PURCHASES ALL SHARES IN COGECO AND COGECO COMMUNICATIONS HELD BY ROGERS

Cogeco Inc. and Cogeco Communications Inc. have noted that CDPQ (Caisse de depot et placement du Quebec) will become an anchor investor in Cogeco Communications as part of the sale by Rogers Communications Inc. of the entirety of its holdings in Cogeco and Cogeco Communications. Cogeco will repurchase for cancellation 5,969,360 of its Cogeco subordinate voting shares (the CGO SVS) from CDPQ. Cogeco Communications will repurchase for cancellation 2,266,537 Cogeco Communications subordinate voting shares (the CCA SVS) from Cogeco, following the conversion of the same number of Cogeco Communications multiple voting shares. CDPQ has also entered into an agreement to sell 5,302,278 of the CCA SVS acquired from Rogers by way of a bought block trade facilitated by a syndicate of underwriters led by CIBC Capital Markets and UBS Securities Canada.

The purchase price in all transactions for each CGO SVS was set at $46.91 and the purchase price for each CCA SVS was set at $51.40, representing, in each case, a 10-per-cent discount relative to the closing price of each of the CGO SVS and the CCA SVS on Dec. 11, 2023. The price per share to be paid by CDPQ to Rogers to acquire the CGO SVS and CCA SVS currently held by Rogers was negotiated at arms' length between CDPQ and Rogers.

Structure of the transactions

CDPQ will initially acquire all of the 5,969,390 CGO SVS and all of the 10,687,925 CCA SVS currently held by Rogers for an aggregate amount of $829-million.

Cogeco will then purchase for cancellation from CDPQ all of the CGO SVS previously held by Rogers at the CGO SVS price, for an aggregate purchase price of $280-million. In order to partially finance such purchase, Cogeco will concurrently sell to Cogeco Communications and CDPQ, 2,266,537 CCA SVS and 1,423,692 CCA SVS, respectively, following the conversion and cancellation of an equivalent number of Cogeco Communications multiple voting shares (the CCA MVS), at the CCA SVS price.

CDPQ will concurrently sell CCA SVS through the bought block trade. The CCA SVS being sold by CDPQ have not been registered under the U.S. Securities Act of 1933, as amended. This news release is not an offer of securities for sale in the United States and CCA SVS may not be offered or sold in the United States except pursuant to an exemption from registration.

The net effect of the foregoing transactions will be the following:

• Cogeco Communications share repurchase of $117-million of CCA SVS (2,266,537 shares) representing approximately 5.1 per cent of all outstanding Cogeco Communications shares.
• Cogeco share repurchase of $280-million of CGO SVS (5,969,390 shares) representing approximately 38.2 per cent of all outstanding Cogeco shares.
• The number of CCA MVS outstanding will be reduced by 23.5 per cent due to the conversion described herein, the number of CCA SVS outstanding will be increased by 4.9 per cent, and the number of outstanding CGO SVS will be reduced by 42.6 per cent.
• Bought block trade of 5.3-million CCA SVS representing an increase in Cogeco Communications' public float of 29.5 per cent.
• CDPQ will hold 6,809,339 CCA SVS representing approximately 16.1 per cent of all outstanding Cogeco Communications shares.

Benefits of the transactions for Cogeco and Cogeco Communications shareholders:

• Immediately accretive on a net-asset-value-per-share and free-cash-flow-per-share basis for Cogeco shareholders resulting from the share repurchase and the sale of a portion of its investment in Cogeco Communications.
• Immediately accretive on a free-cash-flow-per-share basis for Cogeco Communications shareholders resulting from the share repurchase.
• The public float of CCA SVS will be increased by 29.5 per cent to 23,248,858 shares therefore enhancing trading liquidity.

"This transaction is a unique opportunity for the corporations to repurchase shares at an attractive price to realize multiple benefits while ensuring we have the ability to deliver our strategic plan," said Philippe Jette, president and chief executive officer of Cogeco and Cogeco Communications. "Given the current prices of our stocks, which we believe are undervalued, buying back shares represents an attractive use of our capital to build shareholder value," added Mr. Jette.

"Already active with Cogeco Communications through past acquisitions, CDPQ is supporting the growth projects of this leading telecommunications company as connectivity needs continue to grow. This major share purchase, orchestrated by CDPQ, is key for the company and its plan to develop the North American market," said Kim Thomassin, executive vice-president and head of Quebec at CDPQ

Financial details

Concurrently with the closing of the transactions, Cogeco will put in place a three-year $75-million term loan. Cogeco will initially finance its $280-million repurchase of CGO SVS and other related transaction costs and expenses through (i) $117-million in proceeds resulting from a repurchase for cancellation by Cogeco Communications from Cogeco of CCA SVS (resulting from the conversion of the same number of CCA MVS) at the CCA SVS price; (ii) $73-million in proceeds resulting from a sale by Cogeco to CDPQ of CCA SVS (resulting from the conversion of the same number of CCA MVS) at the CCA SVS price; and (iii) a drawdown from its term loan and credit facilities.

Cogeco Communications will initially finance the $117-million repurchase of CCA SVS and other related transaction costs and expenses through a drawdown on Cogeco Communications' existing term revolving facility.

Governance and approvals

A special committee of the board of directors of Cogeco, established in connection with the transactions and composed exclusively of independent directors of Cogeco, unanimously determined, after consultation with its external independent legal and financial advisers, that the repurchase of CGO SVS is in the best interests of Cogeco. RBC Capital Markets provided the CGO independent committee with a fairness opinion stating that the consideration to be paid by Cogeco to repurchase its CGO SVS is fair from a financial point of view to Cogeco. After receipt of the unanimous recommendation of the CGO independent committee, the repurchase of CGO SVS was unanimously approved by the board of directors of Cogeco.

A special committee of the board of directors of Cogeco Communications, established in connection with the transactions and composed exclusively of independent directors of Cogeco Communications, unanimously determined, after consultation with its external independent legal and financial advisers, that the repurchase of CCA SVS is in the best interests of Cogeco Communications. National Bank Financial provided the CCA independent committee with a fairness opinion stating that the consideration to be paid by Cogeco Communications to repurchase CCA SVS is fair from a financial point of view to Cogeco Communications. After receipt of the unanimous recommendation of the CCA independent committee, the repurchase of CCA SVS was unanimously approved by the board of directors of Cogeco Communications.

A favourable decision was obtained from the Autorite des marches financiers to exempt the corporations from the issuer bid requirements under applicable securities legislation with respect to the repurchases of CGO SVS and CCA SVS by Cogeco and Cogeco Communications, respectively.

The repurchases of CGO SVS by Cogeco and CCA SVS by Cogeco Communications are expected to be completed on Dec. 13, 2023.

About Cogeco and Cogeco Communications

Rooted in the communities it serves, Cogeco is a growing competitive force in the North American telecommunications and media sectors, serving 1.6 million residential and business customers. Its Cogeco Communications subsidiary provides Internet, video and phone services in Canada as well as in 13 states in the United States through its business units Cogeco Connexion and Breezeline. Through Cogeco Media, it owns and operates 21 radio stations primarily in the province of Quebec as well as a news agency. Cogeco's subordinate voting shares are listed on the Toronto Stock Exchange (TSX: CGO). The subordinate voting shares of Cogeco Communications are also listed on the Toronto Stock Exchange (TSX: CCA).

We seek Safe Harbor.