(Recasts first sentence, adds comment from government
April 18 Telus Corp, one of Canada's
dominant telecom providers, has reached a new agreement to
acquire struggling wireless startup Mobilicity, in a renewed bid
to overcome government objections on competition grounds.
Mobilicity said late Thursday that it agreed to be acquired
by Telus for C$350 million and that a court-appointed monitor
has recommended the transaction. The deal is still subject to
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 said in announcing the new deal that the Canadian
market for commercial mobile services has changed since January
with recent auctions of spectrum. The company has 165,000 active
subscribers and offers lower-cost unlimited talk and text plans.
Mobilicity said it reached the new deal after Telus
submitted the only acceptable bid among five it received. The
company said it had solicited 25 organizations for proposals.
Jake Enwright, spokesman for Industry Minister James Moore,
told Reuters when asked about the latest deal: "We will not
approve spectrum transfer requests that decrease competition in
our wireless sector."
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, Jeffrey Hodgson in
Toronto and Randall Palmer in Ottawa; Editing by Marguerita Choy
and Leslie Adler)