Telus and Rogers Bid to Buy Mobilicity

by Istvan Fekete on June 22, 2015

Telus is trying again to buy Mobilicity, but this time with a different approach. After three failed attempts to acquire the struggling new entrant in 2013 and 2014, Telus recently submitted the terms of a new proposal: While it would become the new owner of Mobilicity, it would transfer the ownership of some of the small carrier’s coveted spectrum licences to Wind Mobile. The latter would then have additional access to wireless airwaves despite bulking up during the March auction, reports the Financial Post.

You may recall that all three Telus attempts were dismissed by Industry Canada on the grounds that the merger would harm the competitiveness of the Canadian wireless industry. However, this “simple trick” of transferring some of the spectrum to Wind might just be enough to win the government’s blessing for the merger.

Interestingly, the government had hoped that a merger would happen with Wind Mobile, but that wasn’t a viable solution it seems. The two have talked about it, but the stumbling block was the price.

“We continue to be interested in acquiring Mobilicity,” Shawn Hall, a spokesperson at Telus, said during an interview on Friday night. “We recently put forward a proposal to Industry Canada in which we committed to transferring at no cost some of that company’s spectrum to Wind, or if that company doesn’t want it the spectrum, to another new entrant or to Industry Canada for reallocation.”

Telus’ bid comes as a relief for Mobilicity’s stakeholders: The struggling carrier has been under court-supervised creditor protection since September 2013 and is attempting to restructure. Just last month, it secured another four months to review “credible interest” from “various parties” for an “acquisition transaction”.

“We continue to pursue a going-concern transaction that is in the best interest of stakeholders and we continue to engages with a number of parties,” Mobilicity spokesperson Joel Shaffer said in an email. “However, we can’t comment on the specifics of any potential transaction or the actions of others.”

Telus is just one of those “various parties”. Sources speaking with the Globe and Mail have revealed that Rogers is also interested in acquiring the new entrant. The talks with both interested parties are ongoing, sources say, and they may exceed Telus’ latest $350 million bid.

In an interesting turn of events, the director of spectrum management operations at Industry Canada indicated that the government would approve deals involving either Rogers or Telus as early as this month.

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Written by: Istvan Fekete. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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