Top bidders for Mobilicity are TELUS and Quebecor?


Mobilicity’s auction appears to have ended with at least two “serious” bids according to The Globe and Mail. According to its sources, Telus Corp. submitted a CA$350 million bid while Quebecor Inc., the parent company of regional operator Videotron, bid about CA$200 million for the beleaguered carrier.

The TELUS bid is less than the company offered last year but still a substantially higher offer than Quebecor has put on the table. It may still not be enough as the Canadian government has repeatedly said that it would block any deal that would reduce competition in the wireless sector. At the same time, Quebecor’s offer may not be sufficient, especially as it would not cover even what even what Mobilicity’s first-lien note holders are owed.

Other companies that submitted bids include WIND Mobile and Cogeo Cable Inc. WIND Mobile’s bid was estimated at about CA$190 million but the company may not be able to secure the necessary financing even if it was selected as the winning bid. None of these other bids are considered to be worth pursuing though.

Scotia Capital Inc analyst Jeff Fan sees it as an opportunistic move made for “financial reasons rather than strategic reasons.” It could also signal the start of Videotron’s expansion outside of Quebec. Another scenario is that the additional spectrum would be used to expand its network sharing agreement with Rogers Communications. Both options are described as “nothing more than farcical” by Canaccord Genuity analyst Dvai Ghose. In other words, only Quebecor really knows what it hopes to gain from its bid.

For its part, Mobilicity is getting ready to go back to court to try to force a sale to TELUS if more lucrative offers do not show up.

Source : The Globe and Mail