It appears that TELUS has thrown in the towel in its protracted bid to acquire beleaguered carrier Mobilicity. Citing an unnamed source, The Globe and Mail reports that TELUS told Mobilicity of its decision yesterday. It explained that it was doing so because conditions of the sale had not been met. It’s not clear which conditions these were but it’s likely that one was the necessary approval from Industry Canada.
The Mobilicity-TELUS saga goes back about a year. Last May, TELUS first announced plans to acquire Mobilicity for CA$380 million last May only to see the deal blocked by Industry Canada due to a moratorium preventing spectrum that had been set aside for new entrants to be transferred to incumbents. A second attempt followed later in the year but was once again rejected. Earlier this year, TELUS emerged as the only “acceptable transaction” when Mobilicity put itself up for sale. This time, rumours suggested that the Canadian government warned TELUS that it could find itself excluded from the next spectrum auction if it decided to move forward with the acquisition.
With TELUS withdrawing, it remains to be seen how Mobilicity will move forward. A report earlier this year indicated that Videotron was behind the second highest bid but that it came far short of the TELUS one. With TELUS out of the picture, Mobilicity may have no choice but to accept the CA$200 million bid. Alternatively, it could merge with WIND Mobile, another of the bidders, or simply close its doors.
Mobilicity which still has 165,000 subscribers remains under creditor protection until June 30, 2014.
Source : The Globe and Mail