Telus Corp (T.TO), 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 government approval.
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 million.
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)