Quebecor Unloads Media Assets to Fund Wireless Ambitions

by Istvan Fekete on October 7, 2014

Quebecor is closing deals that could help the company expand its wireless arm outside Québec, says Barclays analyst Philip Huang, commenting on a recently announced deal Quebecor has inked with Postmedia.

In fact, you may recall that Quebecor has been vocal about its wireless expansion plans since it acquired spectrum earlier this year. Since then, it has been pushing the government to tweak the wireless rules, as they don’t favour small wireless players in their current state.

As the carrier stated in front of the CRTC, it has already invested $1.8 billion building its own wireless network, and it seems to be ready to invest more to become the fourth national player Ottawa has been “dreaming” about.

From this perspective, the sale of its stable of English newspapers, including the Sun chain of tabloid dailies, makes sense.

“The deal got traction after Mr. Peladeau went into politics,” Postmedia chief executive Paul Godfrey told reporters Monday after announcing the company’s acquisition of 175 English-language papers/specialty publications and digital assets from Quebecor for $316 million in cash.

The price is only a fraction of what Quebecor paid for Sun Media in the late 1990s. As it turns out, discussions regarding selling the media outlets was born two and a half years ago when Peladeau, son of Quebecor founder Pierre Peladeau, approached Postmedia CEO Paul Godfrey with the idea.

“We discussed that. We decided that wasn’t in our best interest,” Godfrey said. “We sort of shadow boxed for a number of months.”

Godfrey wasn’t interested back then, but six months ago, the tables turned: Postmedia was then in a position to buy Sun Media shortly after Peladeau announced that he was leaving leave his role as Quebecor CEO to focus on politics.

The $316 million in cash that Quebecor received would help fund a deal for an ownership stake in Wind Mobile and a bid in the forthcoming wireless spectrum auctions.

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Written by: Istvan Fekete. Follow by: RSS, Twitter, Facebook, or YouTube.

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