Mobilicity has been up for sale now and buyers had until December 2 to cast their bid to purchase Mobilicity along with its 175,000 subscribers – they were hoping for $350 million. Wind put their bid in at $190 million, but the two really serious bids are $350 million from TELUS, down from their previous offer last summer for $380 million, and $200 million from Quebecor's Videotron. The sale could have been done back last summer, but government interference has made the sale more difficult. Mobilicity has tried to find a suitable buyer for the past two years and has been under court protection from its creditors since Fall. Couple that with a Federal ban preventing the company from transferring its wireless licenses to an existing wireless company, such as TELUS – although that is set to expire in 2 weeks – has made the sale even more difficult.
Canada is trying to promote competition, so established wireless companies have great difficulty purchasing another company. Quebecor is a new entrant themselves so they are not bound by the same regulatory restraints that TELUS must face. However, Mobilicity may ask the court to force the sale to TELUS, as the $200 million offer from Quebecor is not enough money to pay even their first-lien note holders – they need the $350 million that TELUS is offering.
During 2008, Mobilicity paid $243.1 million for 10 licenses in Toronto, Vancouver, Calgary, Edmonton and Ottawa and in 2013, they ended up with 175,000 subscribers and almost $500 million in tax losses – the assets of Mobilicity could be used by either TELUS or Quebecor. It is thought that Quebecor is considering expanding nationwide, and if so, the government would step in to help them do just that and then government could claim a victory in keeping a fourth carrier in place to further help competition. Mobilicity is in a real bind – they need to sell, and sell for as much money as they can get to satisfy their creditors. So far, TELUS has offered them the most money, but the government, at least for the next two weeks, are blocking that option. The next offer is $150 million less and would not be near enough money to pay even their first-lien creditors. Something has to happen and it will very soon – let us know on our Google+ Page the company you would like to see purchase Mobilicity.