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Discussion Materials

November 2004









 








	

Disclaimer

These materials are based on information contained in public documents and certain other information provided
by the management of Rogers Communications Inc. ("RCI" and the "Company").  Scotia Capital Inc. ("Scotia
Capital") has had discussions with certain senior officers of the Company but does not assume responsibility for
the accuracy, completeness or reasonableness of information provided to Scotia Capital in such discussions or
otherwise and has not attempted independently to investigate or verify such information, projections, or other
information provided to Scotia Capital and included herein or otherwise used.  Projections included herein
regarding the Company and Rogers Wireless Communications Inc. ("RWC") were prepared by the Company's
management or based on Scotia Capital's estimates.  Scotia Capital, with your consent, has relied, without
independent investigation, upon the accuracy, completeness and reasonableness of the information provided to or
obtained by it and upon the management of the Company with respect to the projections and other information
they provided to Scotia Capital.  Projections involve elements of subjective judgment and analysis, and there can
be no assurance that such projections will be attained.  Scotia Capital independently has not attempted to
investigate or to verify the information provided to Scotia Capital and included herein or otherwise used.  Scotia
Capital expresses no opinion as to the accuracy of the projections provided to it or the assumptions underlying
them.  The preparation of these materials was completed on November 10, 2004.

These materials are intended for the benefit and use of the Company in connection with the transaction discussed
herein and may not be reproduced, disseminated, quoted or referred to, in whole or in part, or used for any other
purpose, without the prior written consent of Scotia Capital.









 








	

Table of Contents



Executive Summary    I

Market Overview   II

Preliminary Financial Analysis   III

Offer Considerations   IV










 








	

Introduction

Scotia Capital ("SC") is pleased to have the opportunity to discuss with Rogers
Communications Inc.  ("RCI" or the "Company") potential opportunities in respect of Rogers
Wireless Communications Inc. ("RWC")

The Scotia Capital professionals present today are:

Scott Dorsey    Managing Director,  Mergers & Acquisitions          (416)
863-7429

      Communications, Media & Technology

John Budreski   Managing Director, Equity Capital Markets         (416) 945-4051

Darren Benson   Associate Director, Mergers & Acquisitions         (416) 945-5318

Firas Kitmitto    Associate,  Mergers & Acquisitions          (416) 945-4599

Scotia Capital cautions that the analysis which follows is very preliminary and indicative in
nature and should not be construed as a valuation, formal or informal.  Further, Scotia
Capital has not had the opportunity to conduct any due diligence on RWC's operations nor
had the opportunity to meet with RWC's management regarding this opportunity or
regarding the financial forecast presented hereafter








 








	

Executive Summary









 








	

Executive Summary

Capitalization

The minority shareholders of RWC represent 9.8% of RCI's market capitalization




























































RWC's EBITDA represents 61.8% of RCI's
EBITDA








 








	

RWC Shareholder Analysis

15 out of the top 20 RWC shareholders are also holders of RCI Class B shares


















Executive Summary








 








	

Executive Summary

RWC Trading Summary








 








	

Executive Summary

Research Analyst Views









 








	

Executive Summary

Exchange Ratio: RCI share per RWC Share


Exchange Ratio

(November 2002 - November 2004)

Relative
outperformance by
RWC

Relative
outperformance by
RCI








 








	

Executive Summary

Illustrative Pricing Parameters

Mid-point of BMO
NB Value Range








 








	

Executive Summary

RWC Offer Overview

Under the proposed exchange ratio of 1.75 RCI shares for each RWC share, 29.0 million RCI
shares would be issued resulting in a equity dilution of 10.2% to current RCI shareholders









 








	

Executive Summary

RWC Offer Overview (continued)









 








	

Executive Summary

Potential Market Reaction

The market will not be surprised by an RCI offer to acquire the RWC minority, it has been expecting an
offer and has to a certain extent already incorporated some takeover premium in to the share price

Possible that RWC shares will initially trade at a premium to the offer value with the market expecting that
RCI may be willing to increase its offer to obtain a successful transaction

Arguments available to RCI to moderate such market expectations include:

The ability to highlight that the offer is within the independent valuator's range (and ultimately that the offer has the
support of RWC's board)

RCI's previous refusal to increase its offer in 2001

RCI's need to only acquire 2.1 million shares to achieve 90% ownership and squeeze out the minority

The market, particularly arbitrageurs, will use many tactics to vocally express that the offer is too low,
including highlighting

The small premium represented by the offer

Analyst estimates for RWC's share price significantly in excess of the offer

Microcell transaction multiples significantly in excess of the offer

Initial arbitrage activity is likely to put downward pressure on RCI's share price while hedge positions are
established

However as trading returns to a more fundamental basis, there will likely be minimal impact on RCI's normalized
trading price

A continuing positive market view of wireless prospects should help to balance any dilution suffered as a result of the
proposed transaction and help to recover from any initial short-term downward pressure








 








	

Executive Summary

Offer Strategy and Timing

The ideal announcement circumstance for this transaction would see RCI announce an offer
for the RWC minority coincident with a favorable valuation range and fairness opinion from
the independent valuator and a unanimous recommendation in favour of the offer from RWC's
board

Such support is likely a week to two weeks away from finalization

Delaying a transaction for such support introduces additional elements of risk

Market risk that the exchange ratio could continue to move against RCI either from normal market
activity, or an information leak, resulting in either an offer that yields a smaller initial premium, or
ultimately a more expensive offer

Disclosure risk as a result of 13D requirements, or the provision of incomplete information in the
marketing of a RWC bond offering

A good second best announcement circumstance would see RCI announce the offer with
disclosure surrounding the independent committee process to date and the preliminary range
arrived at by the independent valuator

This alternative would allow an initial positive spin on announcement in respect of the offer value
while at the same time substantially eliminating market timing and disclosure risks

Use of the takeover bid offer structure places significant additional pressure to accept the
initial offer when take up of only 2.1 million shares are required to successfully complete the
offer

However, the alternative of dissent and appraisal rights will continue to exist for RWC shareholders








 








	

Market Overview









 








	

Market Overview

Capitalization

The minority shareholders of RWC represent 9.8% of RCI's market capitalization




























































RWC's EBITDA represents 61.8% of RCI's
EBITDA








 








	

RWC Shareholder Analysis

15 out of the top 20 RWC shareholders are also holders of RCI Class B shares


















Market Overview








 








	

Market Overview

RWC Trading Summary








 








	

Market Overview

Analyst Targets


Historical Recommendations

Historical Consensus Target Price

Research analysts have upwardly revised  their views on RWC over the last six
months








 








	

Market Overview

Research Analyst Views









 








	

Market Overview

RWC Histogram

90% of the RWC's shares traded on the TSX have traded at less than C$40.00

Average trading volume over the period of 60,819 shares per day

Implies approximately 252 days to turn the float one time

























 








	

Market Overview

Relative Share Performance


Relative Performance

(January 2001 - November 2004)








 








	

Market Overview

Exchange Ratio: RCI share per RWC Share


Exchange Ratio

(November 2002 - November 2004)

Relative
outperformance by
RWC

Relative
outperformance by
RCI








 








	

Preliminary Financial Analysis









 








	

Preliminary Financial Analysis

Preliminary Financial Analysis

Preliminary Financial Analysis

RWC Operating Statistics


RWC Operating Statistics


RWC Operating Statistics


Source: Company Reports








 








	

Preliminary Financial Analysis

Comparative Operating Statistics (1)


(1)  Scotia Capital research.

(1)  Scotia Capital research.

(1)  Scotia Capital research.

(1)  Scotia Capital research.

(1)  Scotia Capital research.








 








	

Preliminary Financial Analysis

Wireless Trading Peer Analysis








 








	

Preliminary Financial Analysis

Cable Trading Peer Analysis








 








	

Preliminary Financial Analysis

Precedent Transaction Analysis








 








	

Preliminary Financial Analysis

Illustrative Pricing Parameters

Mid-point of BMO
NB Value Range








 








	

Preliminary Financial Analysis

Bid Premium Analysis

Pricing a deal at 1.75 RCI shares per RWC shares (an initial price of $50.23, slightly higher
than the mid-point of BMO NB's valuation range), would result in a premium of 14.1% over
the 20-day average of RWC shares

20-day average trading average tends to be the standard benchmark on which institutions will focus on








 








	

Preliminary Financial Analysis

Preliminary Accretion/Dilution Analysis

The transaction is accretive on an earnings basis and slightly
dilutive on a proportionate cash flow per share metric








 








	

Offer Considerations









 








	

Offer Considerations

RWC Offer Overview

Under the proposed exchange ratio of 1.75 RCI shares for each RWC share, 29.0 million RCI
shares would be issued resulting in a equity dilution of 10.2% to current RCI shareholders









 








	

Offer Considerations

RWC Offer Overview (continued)









 








	

Offer Considerations

RWC Offer Overview (continued)

A minimum of 2.1 million shares or 13.0% of the float will need to be
tendered in order to achieve the desired 90%+ ownership (on a fully diluted
basis)








 








	

Offer Considerations

RWC Offer Overview (continued)

For each $1.00 increase in the offer price, RCI shareholders
are diluted by approximately 0.2%








 








	

Offer Considerations

Pro Forma Ownership








 








	

Offer Considerations

Strategic Rationale - Merits

Elimination of the public minority in RWC would provide RCI with significantly greater
operating flexibility

Resolve transfer pricing issues in respect of bundled offerings and shared services

Reduce conflicts regarding which product group owns "shared" customers

Eliminate need for independent review of all significant related party transactions

Having no public minority would allow RCI direct access to the RWC cashflow and financing
capacity and allow greater flexibility in tax planning

The transaction would eliminate a public subsidiary which has not historically been useful as a
public entity for RCI

RWC has rarely been used as a vehicle to access the public equity markets

There is little liquidity in the RWC shares, especially relative to the liquidity of the RCI shares

RWC could still issue public debt as a private entity

Eliminating the minority allows RCI to operate RWC under less scrutiny, offering a greater
ability to take a longer term perspective on operating and capital decisions

Issuing equity from RCI to fund the offer should provide further liquidity to RCI shares, as
RCI's public minority will grow








 








	

Offer Considerations

Strategic Rationale - Issues/Considerations

The current timing is relatively unfavourable for a RCI offering to acquire the RWC minority

The relative exchange ratio between the RCI share price and the RWC share price is close to its
weakest point of the last two years

Recent performance of wireless companies have been strong and on an upward trend

The market has seen a number of wireless consolidations recently pushing up valuations

The transaction is modestly dilutive to RCI in terms of cash flow per share:

As RCI already operates and controls RWC, the transaction will yield few synergies

The transaction may create short-term downward pressure on RCI share price due to the
following:

Subsequent sale of RCI shares by un-natural cable stock holders

Arbitrage of the offer and other hedging activities









 








	

Offer Considerations

Potential Market Reaction

The market will not be surprised by an RCI offer to acquire the RWC minority, it has been expecting an
offer and has to a certain extent already incorporated some takeover premium in to the share price

Possible that RWC shares will initially trade at a premium to the offer value with the market expecting that
RCI may be willing to increase its offer to obtain a successful transaction

Arguments available to RCI to moderate such market expectations include:

The ability to highlight that the offer is within the independent valuator's range (and ultimately that the offer has the
support of RWC's board)

RCI's previous refusal to increase its offer in 2001

RCI's need to only acquire approximately 2.1 million shares to achieve 90% ownership and squeeze out the minority

The market, particularly arbitrageurs, will use many tactics to vocally express that the offer is too low,
including highlighting

The small premium represented by the offer

Analyst estimates for RWC's share price significantly in excess of the offer

Microcell transaction multiples significantly in excess of the offer

Initial arbitrage activity is likely to put downward pressure on RCI's share price while hedge positions are
established

However as trading returns to a more fundamental basis, there will likely be minimal impact on RCI's normalized
trading price

A continuing positive market view of wireless prospects should help to balance any dilution suffered as a result of the
proposed transaction and help to recover from any initial short-term downward pressure








 








	

Offer Considerations

Overview of Recent Going Private Considerations

The Canadian marketplace has seen eight significant going private transactions ("GPTs") in
the last 24 months

Canadian investors have been receptive to these deals, as four of these GPTs have been
successfully completed and three are pending

Since 2001, seven of the nine successful GPTs had initial offer prices at or below the mid-
point of the valuation range determined by the independent committee's valuators:

Five were completed at the initial offer price

Four offer prices were revised upwards

This demonstrates that the market clearing price is more important than the valuation range
determined by the independent committee's advisors in determining the success of GPTs

Four of the nine precedent GPTs were announced in advance of the targets' boards
establishing independent committees and the preparation of formal valuations









 








	

Offer Considerations

Overview of Recent Going Private Considerations (continued)








 








	

Offer Considerations

Overview of Recent Going Private Considerations (continued)

The valuation range can be a key element of negotiations with the independent committee








 








	

Offer Considerations

Offer Strategy and Timing

The ideal announcement circumstance for this transaction would see RCI announce an offer
for the RWC minority coincident with a favorable valuation range and fairness opinion from
the independent valuator and a unanimous recommendation in favour of the offer from RWC's
board

Such support is likely a week to two weeks away from finalization

Delaying a transaction for such support introduces additional elements of risk

Market risk that the exchange ratio could continue to move against RCI either from normal market
activity, or an information leak, resulting in either an offer that yields a smaller initial premium, or
ultimately a more expensive offer

Disclosure risk as a result of 13D requirements, or the provision of incomplete information in the
marketing of a RWC bond offering

A good second best announcement circumstance would see RCI announce the offer with
disclosure surrounding the independent committee process to date and the preliminary range
arrived at by the independent valuator

This alternative would allow an initial positive spin on announcement in respect of the offer value
while at the same time substantially eliminating market timing and disclosure risks

Use of the takeover bid offer structure places significant additional pressure to accept the
initial offer when take up of only 2.1 million shares are required to successfully complete the
offer. However, the alternative of dissent and appraisal rights will continue to exist for RWC
shareholders








 








	

Offer Considerations

Other Considerations

RWC Board support is helpful in the marketing of the offer, and necessary to garnering the support of
certain institutions and index funds that have a policy of not supporting going-private offers that are not
supported by the target board

Notwithstanding the support of the RWC board, institutional shareholders can and will avoid tendering to
the offer if:

a)   They perceive the offer to be unfair

b)   They believe a higher bid from the major shareholder can be obtained

c)   They feel that they have been treated inappropriately

Although the independent valuation range is an important indicator of value and is an essential benchmark
to achieve RWC board support, it is not determinative of deal success

An offer priced in the range does not guarantee that institutions will like the deal

The important factor is the price that will clear the market, i.e. garner maximum support and minimum
dissent

While an initial offer within the independent valuation range is very supportable, market reaction will have
to be gauged throughout the offer period to determine if a small improvement to the offer will significantly
enhance success

Further, RCI should actively communicate (i.e. road show) with RWC shareholders, essentially using this
transaction as an opportunity to meet with major shareholders of RCI & RWC to market the RCI strategy
and seek their support

The take-over bid structure will eliminate any gamesmanship in respect of disgruntled shareholders selling
the RWC shares after the record date and maintaining the vote as seen on the previous 2001 offer