Here we go again. Mobilicity, which has been operating under creditor protection since late September 2013, announced very late yesterday “a proposed going concern transaction” that would see TELUS Mobility acquire the beleaguered carrier for CA$350 million. If this sounds familiar, it’s because it is. TELUS announced back in May 2013 that it would acquire Mobilicity for CA$380 million but the deal was blocked by the Canadian government over “undue spectrum concentration.” Undeterred, the companies continued to talk only to have a second acquisition attempt also rejected. Mobilicity then put itself up for auction in late 2013. It received five bids, including one from TELUS. Lo and behold, only this one, valued at CA$350 million, has been deemed “acceptable transaction.”
“The Transaction is a good outcome from Mobilicity’s restructuring efforts and extensive Sales Process,” said William Aziz, Mobilicity’s Chief Restructuring Officer. “I am confident the Transaction will serve the best interests of Mobilicity’s customers and employees.”
Mobilicity lists a number of reasons why the deal makes sense. Among them are:
- Uninterrupted service for Mobilicity’s 165,000 subscribers who would migrate to TELUS’ HSPA network
- No “foreseen” job losses at Mobilicity
- The honouring of contracts for Mobilicity retail landlords and licensors
It’s not immediately clear how this deal is different from last year’s (except to be for CA$30 million less) but Mobilicity adds that it “believes that the Transaction will not affect competition in the Canadian wireless sector, satisfies the criteria considered by Industry Canada in determining whether to approve a transfer of spectrum licences and meets Industry Canada’s policy objectives in respect of utilizing spectrum for advancing network expansion into non-urban areas.”
We’ll have to see if Industry Canada approves the Mobilicity acquisition by TELUS this time around. In the meantime, Mobilicity is looking to extend its court protection to June 30, 2014.
Source : Mobilicity