April 18 Telus Corp, one of Canada's
dominant telecom providers, has won another chance to overcome
objections by the government to its takeover of struggling
wireless startup Mobilicity.
Mobilicity announced late Thursday that it agreed to a new
deal to sell to Telus for C$350 million and that a
court-appointed monitor has recommended the transaction. The
deal is still subject to government approval.
Mobilicity said it reached the deal after Telus submitted
the only acceptable bid among five it received. The small
company said it had solicited 25 organizations for proposals.
The government last year twice blocked attempts by Telus to
buy Mobilicity on grounds the acquisition would create undue
concentration of ownership of wireless spectrum.
Under a deal blocked in June, Telus would have paid C$380
Mobilicity has 165,000 active subscribers and offers
lower-cost unlimited talk and text plans. It said in announcing
the new deal that the Canadian market for commercial mobile
services has changed since January with recent auctions of
The proposed deal is supported by approximately 95 percent
of the holders of the company's 15 percent senior unsecured
debentures due in 2018, Mobilicity said.
Mobilicity, formerly known as Data & Audio Visual
Enterprises, filed for court protection from creditors last year
after running short of cash.
(Reporting by David Henry in New York and Jeffrey Hodgson in
Toronto; Editing by Marguerita Choy)