March 5, 2001
Netgraphe Inc. accepts revised proposal from Quebecor Media Inc. to consolidate Canoe and Netgraphe, appoints Hugues Simard as CEO
Montreal, Quebec - Netgraphe Inc. announced today that its Board of Directors has accepted a revised proposal from Quebecor Media Inc. to consolidate the assets of Canoe and Netgraphe.
Under the terms of the proposal, Canoe's assets would be sold to Netgraphe in exchange for the issuance to Quebecor Media of 133,675,387 Netgraphe common shares, which would amount to approximately 60.8% of Netgraphe's outstanding shares after the closing of the transaction, on a fully diluted basis (before the reorganization of Netgraphe's capital, as described below).
In addition, the proposal calls for a capital reorganization of Netgraphe under which two new classes of shares would be created: multiple voting shares ("MVS") carrying 10 votes per share, and subordinate voting shares ("SVS") carrying one vote per share. All Netgraphe common shares (including those held by Quebecor Media) would subsequently be converted, at the option of the holder, into MVS or SVS. The SVS would benefit from coattail protections in the event of a takeover bid, and sunset provisions for the conversion of MVS into SVS subsequent to certain events or a specified period of time would apply. Netgraphe shareholders would be offered a 10% premium if they elect to convert their common shares into SVS.
Under the proposal, Quebecor Media would undertake to pay Canoe and/or Netgraphe $10 million during 2001 to finance Canoe's operations.
The transaction would be subject to certain conditions, including the signing of a final consolidation agreement, all applicable regulatory approvals, the consent of third parties and the approval of Netgraphe shareholders, in accordance with the rules of the Toronto Stock Exchange and applicable securities laws dealing with related-party transactions.
Netgraphe will call a special shareholders meeting to approve the transaction, in accordance with applicable regulations.
Messrs. Normand Drolet, Marc Copti, Yves Williams and Christian Guy have made an irrevocable commitment to vote all the Netgraphe common shares they hold or control in favour of the transaction at the Netgraphe special shareholders meeting, and have vouched that the voting rights carried by those shares total over 50% of the votes of Netgraphe's minority shareholders.
Netgraphe also announced today that its Board of Directors appointed Mr. Hugues Simard to the position of President and Chief Executive Officer of Netgraphe. Mr. Simard is also President and Chief Executive Officer of Canoe. Mr. Simard will continue to work closely with the existing management teams to effect the swift merger of the operations of Canoe and Netgraphe.
ABOUT NETGRAPHE
Netgraphe is an Internet editor that creates, acquires and manages high-traffic Web sites. It focuses on business opportunities in the Internet sector in Quebec and in French-speaking countries, providing content distribution, advertising, e-commerce and other services such as Web-site integration, design, production and management.
Netgraphe operates the following portals and Web sites: La Toile du Quebec (toile.com), InfiniT.com, Jobboom.com, Webfin.com, Multimedium.com, and Megagiciel.com. Netgraphe is listed on the Toronto stock market under the trading symbol WWW.
ABOUT CANOE
Since its launch in 1996, the CANOE network has been a leader in Canada's new media industry.
The products on CANOE's English-language network include SLAM! Sports, JAM! Showbiz, Canoe Money, CNEWS, C-Health, AUTONET.CA, Lifewise, and Classified Extra.
The products on CANOE's French-language network include Topo Info, Chrono Sports, Ratio Finance, Tempo Arts et spectacles, Art de vivre, Maison Passion, Ados, AUTONET.CA/francais, Classées Extra, Réseau Contact and Viasite emploi.
CANOE offers a variety of other services such as SHOP.CANOE.CA, a unique on-line shopping site, site personalization services, free e-mail, weather, lotteries and more.
The destinations www.canoe.ca and www.canoe.qc.ca host the on-line versions of Sun Media newspapers and eight City Sites carrying local news and community-focused content (FYI in English and ICI in French).
The CANOE network also includes a site in France at the address www.canoe.fr, which was launched in September 2000, and a site in Spain at the address www.micanoa.com, launched in December 2000.
For additional information:
Netgraphe Inc.:
J. Serge Sasseville
Corporate Secretary
Netgraphe Inc.
Telephone: (514) 877-5143
Quebecor Media Inc:
Luc Lavoie
Executive Vice President, Corporate Affairs
Quebecor Inc.
Telephone: (514) 877-9777
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