Quebecor Inc., Quebecor Media Inc. and Caisse de depot et

Quebecor Inc., Quebecor Media Inc. and Caisse de depot et placement
du Quebec Reach an Agreement on the Partial Sale of Caisse de depot
et placement du Quebec's Interest in Quebecor Media Inc. 
MONTREAL, QUEBEC -- (Marketwire) -- 10/03/12 -- Quebecor Inc.
(TSX:QBR.A)(TSX:QBR.B)(QI), Quebecor Media Inc. (QMI) and Caisse de
depot et placement du Quebec (CDP) announced today that they have
reached an agreement (the Agreement) regarding a partial sale of
CDP's 45.3% interest in QMI, with respect to which the parties have
agreed on a value of $2.75 billion.  
The Agreement provides for the completion of the following two
transactions: 


 
--  the repurchase by QMI of 20,351,307 shares of QMI held by CDP,
    representing approximately 36.4% of CDP's interest before closing, for
    an aggregate purchase price of $1.0 billion, payable in cash; and
--  the purchase by QI of 10,175,653 shares of QMI held by CDP, representing
    approximately 18.2% of CDP's interest before closing, in consideration
    of the issuance to an affiliate of CDP of $500 million aggregate
    principal amount of subordinated convertible debentures of QI, which are
    convertible into QI Class B Subordinate Shares (the Convertible
    Debentures). 

 
Upon completion of these transactions, which is currently expected on
or around October 11, 2012 (subject to a financing condition in
favour of QMI and customary closing conditions, including regulatory
approvals), CDP will hold 25,439,134 shares of QMI, representing a
24.6% interest in QMI (excluding the dilution from options under
QMI's stock option plan).  
"The terms and conditions of the Agreement were determined with a
view to meeting certain fundamental objectives, including those of
ensuring that QI and QMI continue to enjoy a sufficient level of
operational and financial flexibility and maintaining a debt level
favourable to ongoing refinancing of the maturities of QMI's various
debt instruments. Considering the expected financial performance of
QMI, we believe that the price paid is fair," said Jean-Francois
Pruneau, Chief Financial Officer of QI and QMI.  
"We are convinced of QMI's potential to create value. For this
reason, we are retaining a substantial stake in the company", said
Michael Sabia, President and 
Chief Executive Officer of CDP. 
Cash purchase by QMI 
QMI intends to finance the repurchase of the 20,351,307 shares of QMI
held by CDP by accessing financial markets.  
The parties' intention in entering into this Agreement is to enable
the immediate monetization by CDP of a significant portion of its
interest in QMI. CDP will also have the ability to sell its remaining
shares in QMI on or after January 1, 2019 through an initial public
offering (IPO), therefore completing the monetization of its
investment in QMI. 
Purchase by QI and issuance of convertible debentures by QI 
The Convertible Debentures will have a term of six years expiring in
2018 and will bear interest at an annual rate of 4.125%, payable
semi-annually in cash, in QI Class B Subordinate Shares or with the
proceeds from the sale of QI Class B Subordinate Shares.  
At maturity, the Convertible Debentures will be payable in cash by QI
at the outstanding principal amount, plus accrued and unpaid
interest, subject to prior redemption, conversion, purchase or
repayment.  
One day prior to maturity (the Redemption Date), QI may redeem the
outstanding Convertible Debentures by issuing that number of QI Class
B Subordinate Shares obtained by dividing the outstanding principal
amount by the then current market price of a QI Class B Subordinate
Share, subject to a floor price of $38.50 per share (that is, a
maximum number of 12,987,013 QI Class B Subordinate Shares
corresponding to a ratio of $500 million to the floor price) and a
ceiling price of $48.125 per share (that is, a minimum number of
10,389,610 QI Class B Subordinate Shares corresponding to a ratio of
$500 million to the ceiling price).  
At any time prior to the Redemption Date, QI may redeem or convert,
in whole or in part, the outstanding Convertible Debentures, subject
to the terms of the trust indenture to be entered into among QI and
Computershare Trust Company of Canada at closing (the Indenture).  
The Convertible Debentures will be convertible, at all times prior to
the maturity date, into QI Class B Subordinate Shares by the holder
in accordance with the terms of the Indenture.  
In all cases, QI has the option to pay an amount in cash equal to the
market value of those shares, being the product of (a) the number of
QI Class B Subordinate Shares that would have otherwise been issued
and (b) the then current market price of a QI Class B Subordinate
Share. 
A registration rights agreement granting demand registration rights
and piggy-back registration rights to CDP in respect of the
Convertible Debentures and the underlying QI Class B Subordinate
Shares will be entered into at closing.  
CDP's remaining interest - Exit right 
The Agreement, which does not result in any balance sheet obligation
for QMI or QI, provides that on or after January 1, 2019, CDP will
have exit rights, including requiring that QMI carry out an IPO or
selling CDP's remaining interest in QMI to a financial third party,
without providing any right of first refusal or first offer to QI or
QMI.  
In addition to the exit rights described above, demand registration
rights and piggyback registration rights will be granted by QMI in
favour of CDP by way of a separate agreement at closing. 
Changes to the QMI shareholders' agreement  
In order to allow the exercise by CDP of the exit rights referred to
in the previous paragraph, the parties have agreed to amend the
shareholders' agreement between QI, CDP Capital d'Amerique
investissements inc. (formerly Capital Communications CDPQ inc.) and
QMI dated October 23, 2000, as consolidated and amended by a
shareholders' agreement dated December 11, 2000.  
Subject to the amendments referred to above, the material terms and
conditions of the shareholders' agreement will remain unchanged. The
existing shareholders' agreement can be consulted on SEDAR, under the
profile of QI, at www.sedar.com. 
Closing 
The transactions contemplated in the Agreement are currently expected
to be completed on or around October 11, 2012, subject to a financing
condition and customary closing conditions for transactions of this
nature and regulatory approvals, including the approval of the
Toronto Stock Exchange. 
This press release does not constitute an offer to sell or the
solicitation of an offer to buy or sell securities in any
jurisdiction. The securities referred to herein have not been and
will not be registered under the U.S. Securities Act of 1933 or any
state securities laws and may not be offered or sold in the United
States absent registration or an applicable exemption from the
registration requirements. The securities referred to herein have not
been and will not be qualified for distribution to the public under
applicable Canadian securities legislation. 
Forward-Looking Statements 
The statements in this press release that are not historical facts
are forward-looking statements and are subject to significant known
and unknown risks, uncertainties and assumptions which could cause
Quebecor's actual results for future periods to differ materially
from those set forth in the forward-looking statements.
Forward-looking statements may be identified by the use of the
conditional or by forward-looking terminology such as the terms
"plans," "expects," "may," "anticipates," "intends," "estimates,"
"projects," "seeks," "believes" or similar terms, variations of such
terms or the negative of such terms. Certain factors that may cause
actual results to differ from current expectations include
seasonality (including seasonal fluctuations in customer orders),
operating risk (including fluctuations in demand for Quebecor's
products and pricing actions by competitors), insurance risk, risks
associated with capital investment (including risks related to
technological development and equipment availability and breakdown),
environmental risks, risks associated with labour agreements, risks
associated with commodities and energy prices (including fluctuations
in the cost and availability of raw materials), credit risk,
financial risks, debt risks, risks related to interest rate
fluctuations, foreign exchange risks, risks associated with
government acts and regulations, risks related to changes in tax
legislation, and changes in the general political and economic
environment. Investors and others are cautioned that the foregoing
list of factors that may affect future results is not exhaustive and
that undue reliance should not be placed on any forward-looking
statements. For more information on the risks, uncertainties and
assumptions that could cause Quebecor's actual results to differ from
current expectations, please refer to Quebecor's public filings
available at less than www.sedar.comgreater than and less than
www.quebecor.comgreater than including, in particular, the "Risks and
Uncertainties" section in Quebecor's Management Discussion and
Analysis for the year ended December 31, 2011, and the "Item 3. Key
Information - Risk Factors" as well as statements located elsewhere
in Quebecor Media's annual report on Form 20-F for the year ended
December 31, 2011. 
The forward-looking statements in this press release reflect
Quebecor's expectations as of October 3, 2012, and are subject to
change after that date. Quebecor expressly disclaims any obligation
or intention to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as required by applicable securities laws. 
About Quebecor and Quebecor Media 
Quebecor Media Inc. is a subsidiary of Quebecor Inc. (TSX:QBR.A)
(TSX:QBR.B), one of Canada's most important holding companies
operating in the telecommunications and media businesses. With more
than 16,000 employees, Quebecor Media Inc., through its subsidiary
Videotron Ltd., is an integrated communications company engaged in
cable television, interactive multimedia development, Internet access
services, cable telephone services and mobile telephone services.
Through Sun Media Corporation, Quebecor Media Inc. is the largest
publisher of newspapers in Canada. It also operates Canoe.ca and its
network of English and French language Internet properties in Canada.
In the broadcasting sector, Quebecor Media Inc. operates, through TVA
Group Inc., the number one French language general interest
television network in Quebec, a number of specialty channels and the
SUN News English language channel. Another subsidiary of Quebecor
Media Inc., Nurun Inc., is a major interactive technologies and
communications agency with offices in Canada, the United States,
Europe and Asia. Quebecor Media Inc. is also active in magazine
publishing (TVA Publishing Inc.), book publishing and distribution
(Sogides Group Inc. and CEC Publishing Inc.), the production,
distribution and retailing of cultural products (Archambault Group
Inc. and TVA Films), video game development (BlooBuzz Studios Inc.),
DVD, Blu-ray disc and videogame rental and retailing (Le SuperClub
Videotron Ltd), the printing and distribution of regional newspapers
and flyers (Quebecor Media Printing Inc. and Quebecor Media Network
Inc.), news content production and distribution (QMI Agency),
multiplatform advertising solutions (QMI Sales) and the publishing of
printed and online directories, through Quebecor MediaPages(TM).  
About Caisse de depot et placement du Quebec 
Caisse de depot et placement du Quebec is a financial institution
that manages funds primarily for public and private pension and
insurance plans. As at December 31, 2011, it held $159.0 billion in
net assets. As one of Canada's leading institutional fund managers,
the Caisse invests in major financial markets, private equity and
real estate. For more information: www.lacaisse.com.  
The Toronto Stock Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release. 
Contacts:
Sources:
Quebecor and Quebecor Media
Jean-Francois Pruneau, Chief Financial Officer
Quebecor Inc. and Quebecor Media Inc.
(514) 380-4144
jean-francois.pruneau@quebecor.com 
Caisse de depot et placement du Quebec
Maxime Chagnon
Senior Director, Media Relations
(514) 847-5493
mchagnon@lacaisse.com 
Information:
Quebecor Media Inc.
Martin Tremblay, Vice President, Public Affairs
(514) 380-1985
martin.tremblay@quebecor.com
 
 
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