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MTS Allstream The troubled history of AT&T Corp.’s former Canadian subsidiary has finally come to an end. In June, Manitoba Telecom Services Inc. completed its $1.3 billion acquisition of Allstream Inc., previously known as AT&T Canada. Along the way MTS defeated a legal challenge from BCE Inc. (Bell Canada Enterprises), which wasn’t eager to see a new competitor in the national telecom market. AT&T Canada began life in 1999 as an optimistic venture for its parent company, but later turned into a headache for the U.S. telecom giant because of Ottawa’s restrictions on foreign investment. A $3.4 billion debt subsequently drove AT&T Canada into insolvency proceedings, and it emerged as the sleeker and slimmer Allstream. MTS, which launched its bid for Allstream in March, offered $17 in cash plus 0.825 of its own shares for each Allstream share. For MTS, the deal was driven by a desire to expand beyond its home province. That didn’t sit well with BCE, which held a 22 percent equity interest in MTS and had signed a noncompetition agreement with the Manitoba company. BCE sued MTS in May, alleging that the Allstream deal violated their pact. In June an Ontario court rejected BCE’s request for an injunction blocking the MTS/Allstream deal, and the acquisition closed two days later. The new MTS Allstream Inc. is now poised to be a formidable challenger to Canada’s two largest telecoms, BCE and Telus Corporation. But the industry may yet see further consolidation. At press time Vancouver-based Telus was pursuing an $834 million bid for Montreal’s Microcell Telecommunications Inc. For acquiror Manitoba Telecom Services Inc. (Winnipeg) In-house: Executive vice president � business development, general counsel, and corporate secretary Peter Falk, director Irene Groot-Koerkamp, and senior associate counsel Ellen Leibl. Torys (Toronto ): Corporate: Andrew Beck, Kevin Morris, James Turner, and associates Cindy Cameron, John Emanoilidis, Jos�e Guibord, and Ilana Mantell. Tax: James Welkoff and associates Peter Keenan and Jennifer Leach. Insolvency: Scott Bomhof. Environmental: Leonard Griffiths. Pensions: David Vincent. Competition: Jay Holsten and associate Margaret Forbes. Litigation: Linda Plumpton, James Tory, and associate Andrew Gray. (Beck, Mantell, and Keenan are in the firm’s New York office.) Torys has previously worked for MTS on what Turner calls “extraordinary litigation.” Aikins, Macaulay & Thorvaldson (Winnipeg ): Corporate: John Braun, Carmele Peter, Richard Yaffe, and associate Michelle Redekopp. Litigation: Jonathan Kroft. For target Allstream, Inc. (Toronto) In-house: Senior vice president, general counsel, secretary, and chief privacy officer Scott Euwart. Stikeman Elliott (Montreal ): M&A: Elizabeth Breen, Brian Pukier, David Weinberger, and Marvin Yontef. Income tax: Dean Kraus and Lianne Miller. Antitrust: Shawn Neylan and associates Roula Eatrides, Christopher Flood, Sabina Han, Wesley Ng, and Deborah Salzberger. (All are in the firm’s Toronto office, except for Eatrides and Han, who are in Ottawa.) Stikeman Elliott withdrew in April after discovering a conflict. While Yontef will not comment on the nature of the conflict, he says the firm’s resignation was “not acrimonious.” Borden Ladner Gervais (Toronto ): Corporate and securities: Francis Allen, Frank Callaghan, Fr�d�ric Chatel, Richard Shannon, and associate Dyana McLellan. Litigation: Benjamin Glustein and Frank Newbould. Tax: Larissa Tkachenko. (Chatel and Shannon are in the firm’s Montreal office.) Borden Ladner took over as lead outside counsel for Allstream after Stikeman Elliott’s departure. McMillan Binch (Toronto ): Competition: A. Neil Campbell and Mark Opashinov. The firm served as competition counsel. Cravath, Swaine & Moore (New York ): Corporate: Thomas Brome and associate Alyssa Caples. Cravath counseled Allstream on issues such as delisting from Nasdaq. � Rena Paul EnCana Tom Brown The churn in North American energy companies continues. On May 19 Calgary-based EnCana Corporation, North America’s largest independent natural gas producer, completed a $2.7 billion friendly takeover of Denver’s Tom Brown, Inc. Then, in June and July, EnCana announced that it was selling three separate oil and gas properties for a combined $675 million as part of a planned divestiture. EnCana announced its $48-per-share cash bid for Tom Brown on April 15. The offer was quickly approved by Tom Brown’s board of directors, as well as Canadian and U.S. regulators. EnCana also agreed to assume $350 million in Tom Brown debt as part of the deal. The companies are two of the three top leaseholders of oil and gas properties owned by the U.S. government. The EnCana/Tom Brown merger is one of a number of recent deals prompted by the strong North American market for natural gas. Oklahoma City � based Kerr-McGee Corporation is currently in the process of acquiring Denver’s Westport Resources Corporation for $3.4 billion [Deals & Suits, August]. For acquiror EnCana Corporation (Calgary) In-house: General counsel and corporate secretary Kerry Dyte, Q.C. Acquisitions and investitures: associate general counsel Barry Gilchrist and Patricia Smith-Grayton, and U.S. oil and gas counsel Mary Viviano. Securities: associate general counsel Gary Molnar. Banking: senior counsel Jeff Paulson. Paul, Weiss, Rifkind, Wharton & Garrison (New York ): M&A: Jeffrey Marell, Robert Schumer, and associate Todd Finger. Employee benefits: Michael Segal. Securities: Andrew Foley and Ted Maynard. Tax: Peter Rothenberg. Environmental: Gaines Gwathmey. Blake, Cassels & Graydon (Toronto ): Corporate and securities: Pat Finnerty. Banking: Dan Fournier. Competition: Rob Kwinter and associate Michael Piaskoski. Oil and gas: Craig Spurn. (Finnerty, Fournier, and Spurn are in the firm’s Calgary office.) Holland & Hart (Denver ): Davis O’Connor. O’Connor acted as U.S. oil and gas counsel to EnCana. For target Tom Brown, Inc. (Denver) In-house: General counsel Bruce DeBoer. After the deal was completed, DeBoer left Tom Brown and was replaced as general counsel by Mary Viviano of EnCana. Vinson & Elkins (Houston ): M&A: Jeffrey Floyd, Thomas Mason, Douglas McWilliams, and associates Luke Stevens Putnam and S. Griffith Aldritch. Vinson & Elkins handled U.S. M&A aspects of the deal. It has worked with Tom Brown for over 20 years. Macleod Dixon (Calgary ): Securities and corporate: Kent Kufeldt. Antitrust: John Carleton. � Jonathan Moxey Fortis Aquila Several thousand customers in Alberta and British Columbia will now get their electricity from a Canadian-owned utility instead of an American one. On May 31 Fortis Inc., based in St. John’s, Newfoundland, completed its $1.12 billion purchase of assets in western Canada from Aquila, Inc., which is headquartered in Kansas City, Missouri. The acquisition was financed partly by a loan from a syndicate led by The Bank of Nova Scotia, and partly by a series of public offerings. The deal was originally announced last September. In a press release, Fortis CEO and president H. Stanley Marshall explained that the goal of the acquisition was to increase the company’s “regulatory and geographic diversity.” Fortis already has a strong presence in eastern Canada, but with its acquisition of Aquila’s assets, it now distributes electricity to 385,000 customers in Alberta and another 140,000 in British Columbia. According to Aquila spokesman Al Butkus, his company has been selling off international utility assets in an effort to strengthen its balance sheet in the wake of increased industry regulation spurred by the Enron Corp. scandal. Aquila currently distributes electricity and natural gas in several states, including Colorado, Kansas, and Missouri. The deal received regulatory approval from British Columbia and Alberta provincial authorities in April, and from Kansas regulators in May. The $1.12 billion purchase price is subject to adjustments to be determined in the third quarter of 2004. For acquiror Fortis Inc. (St. John’s, Newfoundland) In-house: General counsel and corporate secretary Ronald McCabe. For Newfoundland Power Inc.: Vice president of regulatory affairs and general counsel Peter Alteen. Macleod Dixon (Calgary ): Corporate: John Carleton, Alan Harvie, and associates Deidre Derworiz, Shawn Hinch, and Luanne Morrow. Securities: Jack MacGillivray. Regulatory: L. Bernette Ho. Intellectual property: associates David Craddock and Keenan Moroz. The firm handled M&A aspects of the deal. Lang Michener (Toronto ): Corporate: Karl Gustafson, Q.C., David Ross, and associates Karam Bayrakal, Sandra Knowler, Christine Mingie, and J. Larry Nelson. Securities: Bernhard Zinkhofer. Real estate: Anthony Knight. Banking: John Morrison and associate Graham Matthews. Tax: Peter Botz. (All are in the firm’s Vancouver office.) The firm handled M&A aspects of the deal. Davies Ward Phillips & Vineberg (Toronto ): Corporate and securities: James Reid, Arthur Shiff, and associates Donna Aronson and Kerry O’Reilly. Tax: John Zinn. Securities: Melanie Koszegi, Carol Pennycook, Gerald Shepherd, and Jennifer Toone. (Shepherd and Toone are in New York.) The firm worked on financing aspects of the deal. Curtis, Dawe (St. John’s, Newfoundland ): Corporate: Aubrey Bonnell, Q.C., and associate Regan O’Dea. The firm advised Fortis because the company is incorporated in Newfoundland. For seller Aquila, Inc. (Kansas City, Missouri) In-house: Senior vice president, general counsel, and corporate secretary Leslie Parrette, Jr., assistant general counsel Brogan Sullivan, senior corporate counsel Bradley Bacon, and corporate counsel Chris Courts. Burnet, Duckworth & Palmer (Calgary ): Corporate: Alicia Quesnel, W.H. Winters, and associate Robert Betteridge. Employment: Gina Ross. Farris, Vaughan, Wills & Murphy (Vancouver ): Commercial and regulatory: Dean O’Leary. Regulatory: George Macintosh, Q.C. Employee pensions: Geoffrey Lewis. Commercial: associate Lisa Skakun. Securities: associate David Selley. Stewart McKelvey Stirling Scales (Halifax ): Nova Scotia issues: Maurice Chiasson. New Brunswick issues: Rodney Gould. (Gould is in the firm’s Saint John, New Brunswick, office.) For banking syndicate led by the Bank of Nova Scotia (Toronto) Fasken Martineau DuMoulin ( Toronto ): Banking: John Torrey and associate David Johnson. For underwriters led by Scotia Capital Inc. ( Toronto) Stikeman Elliott ( Toronto ): Corporate and securities: Joel Binder and associates Gregory Hogan and Nir Katzour. Regulatory: associate Glenn Zacher. Tax: Lianne Miller. (Katzour is now an associate at Goodman and Carr in Toronto.) � Taeho Lim

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