MTS Reviews Its Allstream Options

by Jordan Richardson on September 14, 2012

In launching a so-called strategic review of its Allstream division, Manitoba Telecom Services seems to be sending a clear message that it’s looking to sell.

According to some sources, Allstream has actually been on the blocks for months now and is very much up for offers. On Thursday, MTS claimed to be reviewing its options for the division. The outright sale is but one option, with other possibilities on the table including a partnership with another dealer or the prospect of generating new risk capital.

One of the issues in play here is that Allstream could be in the market for some foreign investment cash, what with Ottawa’s newly-relaxed rules on the topic. MTS is looking for international buyers after the pursuit of Canadian buyers proved unfruitful.

But for now, MTS is publicly suggesting that it has no real moves in place for the division.

“With a clear strategy, strong traction in the growing market for IP services, and seven consecutive quarters of year-over-year EBITDA growth, Allstream is the strongest it has been in years,” said chief executive officer Pierre Blouin in a statement. “For this reason, it is important to understand that this process is wide-ranging and does not assume that any significant change is necessary or desirable.”

MTS has hired a pair of investment banks, Morgan Stanley and CIBC World Markets, to presumably help look for a potential purchaser for Allstream. Thursday saw MTS confirm the hiring of the two banks.

Allstream deals in telecommunications services to medium and large businesses in Canada. It connects approximately 30,000 kilometres of cable in major Canadian cities and is considered quite lucrative for its size.

Among those said to have been interested in Allstream in the past are Rogers Communications, Telus, Globalive, Bell Canada, and Shaw. Deals fell through over disagreements over price, with some analysts suggesting that Allstream could fetch around $900 million.

Of course, MTS has been mum about the whole thing so far even as speculation has run rampant.

“The company does not intend to disclose any developments with respect to this strategic review process until such time as the Board approves a particular course of action or otherwise determines that further disclosure is appropriate or required,” a company statement said. “There is no assurance or expectation that any changes will be made as a result of this process.”

Did you like this post ? TheTelecomBlog.com publishes daily news, editorial, thoughts, and controversial opinion – you can subscribe by: RSS (click here), or email (click here).

Written by: Jordan Richardson. www.digitcom.ca. Follow TheTelecomBlog.com by: RSSTwitterFacebook, or YouTube.

{ 1 trackback }

MTS agrees $520m Allstream deal with Accelero — TheTelecomBlog.com
May 27, 2013 at 6:03 am

{ 0 comments… add one now }

Previous post:

Next post: