Rogers to Buy Mobilicity for $465 Million

by Istvan Fekete on June 24, 2015

The Globe and Mail reports that Mobilicity’s sour days may have come to an end with its acceptance of a $465 million offer from Rogers. After considering offers from Telus and Rogers, it looks as though the struggling carrier’s backers have opted to move forward with Rogers’ offer.

The filing, which was posted overnight, confirms the bid and asks the court in its restructuring process to approve the deal on Wednesday.

As of today, Mobilicity’s main asset is the spectrum it purchased back in 2008 for $243 million –it has only about 155,000 subscribers. That compares to Rogers’ 9.1 million and Wind Mobile’s 800,000. Telus, the second bidder, has 8.5 million wireless subscribers.

You may recall that Telus has bid on the small carrier three times – in 2013 and 2014 – and that the federal government rejected the offers, saying that it would hurt the competitive landscape of the Canadian mobile industry. Telus first offered $380 million, but later dropped the bid to $350 million.

Despite Telus’ interest in Mobilicity, the creditors preferred Rogers’ offer, as they think it is more likely to be approved by the federal government. The deal includes the transfer of some wireless spectrum to Wind Mobile, which is thought to be the factor that could gain Industry Canada’s blessing for the acquisition.

Bill Aziz, Mobilicity’s chief restructuring officer stated in the affidavit, “It is my understanding, given recent developments in the Canadian wireless industry and specifically recent auctions of spectrum, that Industry Canada no longer has the same concerns it once did about ‘undue spectrum concentration’ among certain wireless carriers in Canada.”

Telus, however, won’t give up so easily, sources say. It allegedly offered more than Rogers, and now that the creditors have officially opted for Rogers, it could challenge the deal in court.

What is rather interesting is that Rogers and Telus increased their bids despite the value of the company falling?

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

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