Cancom Acquires Star Choice Through Share Exchange.

TORONTO--(BUSINESS WIRE)--Nov. 11, 1998--Canadian Satellite Communications Inc. (ME:SAT) (TSE:SAT) (Cancom) and Star Choice Communications Inc. (VSE:STC) (Star Choice) jointly announced today that they have entered into a Reorganization and Share Exchange Agreement that will ultimately result in the creation of a major satellite-based communications company serving consumers and business customers across North America.

Both Cancom and Star Choice are major providers of satellite services in Canada. Cancom is a leader in the domestic business-to-business marketplace through its broadcast, tracking and satellite distance learning lines of business. Star Choice, the first Canadian direct to home provider to become operational, has successfully penetrated the domestic retail marketplace with its small dish satellite technology, high quality image and sound and attractive entertainment menus.

Completion of the transaction is subject to approval by Star Choice shareholders and applicable regulatory authorities. Until such approvals are obtained, the shares of Star Choice acquired by Cancom shall be subject to a trust that will have first been approved by the Canadian Radio-television and Telecommunications Commission ("CRTC").

Under the terms of the Agreement, Star Choice will seek shareholder approval to amend the attributes of its common shares to provide for mandatory exchange of Star Choice common shares for common shares of Cancom at a ratio of one common share of Cancom for every 4.8 common shares of Star Choice. Holders of Star Choice warrants will be eligible for the share exchange on the same terms as holders of Star Choice common shares. Star Choice 14 percent preferred shares, all of which are owned by Shaw Communications Inc., will be exchanged for a new series of Cancom 9 percent preferred shares which will be convertible, subject to applicable regulations, into Cancom common shares at an exercise price of $16 per share. It is a term of these Cancom preferred shares that the dividend and redemption obligations may be satisfied, at the option of Cancom, by the issuance of additional preferred shares of Cancom. Following these transactions, and subject to CRTC approval, Star Choice will become a wholly-owned subsidiary of Cancom. In addition, three of Star Choice's current directors will be appointed to the Cancom board of directors.

The transaction is expected to close by the middle of February 1999 but will remain subject to CRTC approval.

The combination of Cancom and Star Choice will generate considerable synergies, building on Star Choice's strength in digital direct-to-home service and Cancom's strengths in wholesale distribution and network management.

Duncan McEwan, Cancom's President and Chief Executive Officer, stated:

"The agreement we have reached today creates a major satellite company with proven performance in the satellite-based communications industry. Given the complementary cultures, financial positions and business plans of Cancom and Star Choice, I am confident that the proposed arrangements will bring long-term rewards to all of our shareholders."

Brian Neill, Chairman of Star Choice, stated:

"It is clear that in order to be more competitive in the broadcasting and telecommunications markets of today, Canada needs strong players to build its satellite industry. Over the past two years we have made a good start, with our progress exceeding expectations. It is now essential that we build on our success and continue to expand the customer base for Canadian satellite services."

Cancom (TSE, ME:SAT) is Canada's leading expert in evaluating, selecting, integrating and implementing satellite-based solutions for business. Cancom operates in four main lines of business. Cancom Broadcast Solutions delivers a wide range of digital TV signals and provides video distribution to a number of broadcasters across the continent. Cancom Tracking solutions provides tracking and messaging for the Canadian trucking industry. Cancom Learning Solutions builds and maintains private satellite interactive distance learning networks and communications for business and governments. Cancom Data solutions designs, implements and manages multi-protocol, Internet/Intranet-based networks that link hundreds of branch and head offices.

Star Choice (VSE:STC) provides direct-to-home services to residences and businesses across Canada and uplinking services to Canadian programmers. Its direct-to-home service is available from over 4,000 retailers coast to coast serving over 125,000 subscribers.