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Clearnet gains on Telus purchase premium

Clearnet Communications Inc. (Nasdaq: CLNT) shot up Monday on news it is being acquired in a deal that will create Canada's largest wireless company in terms of annual revenue, customer growth and wireless spectrum position.

Shares were up 13 1/4 to 44 1/4, or 43 percent after news the company, which also trades on the Toronto stock exchange under the symbol (TSE: NET.A), is being bought by Telus Corp. (TSE: T).

Telus has agreed to offer to acquire all of the shares of the national digital wireless company for C$6.6 billion, or US$4.48 billion, based on Monday's exhange rate at 11 am EDT.

Under the terms of the deal, Telus will offer to acquire all of the outstanding shares of Clearnet for C$70 per share, or US$47.48, a 53 percent premium on Friday's closing price.

The deal gives Telus, based in western Canada, a cross-Canada wireless network without the expense of expansion. Synergies from the transaction, including tax-losses carried forward, operating and revenue synergies, are estimated at approximately C$2.1 billion to C$2.4 billion, or US$1.42 billion to US$1.62 billion.

George Cope, President and CEO of Clearnet, will assume leadership of the combined wireless entity as its president and CEO.

Clearnet shareholders have the right to elect to receive C$70 in cash or 1.636 Telus non-voting shares for each Clearnet share tendered.

Both companies bring strategic partnerships with U.S. wireless carriers to the table: Clearnet has partner Nextel Communications, Inc. (Nasdaq: NXTL) and Nextel Partners, Inc. (Nasdaq: NXTP), and Telus has a partnership with Verizon (NYSE: VZ), which will give its cellular and PCS customers seamless, single-rate roaming North America wide.

The transaction is expected to close in October.