Is the $350 million TELUS/Mobilicity Deal DOA?

This is the third time that TELUS has tried to purchase Mobilicity, although the first two times the Industry Minister James Moore has blocked their attempts.  According to our source, analyst Jeff Fan of Scotia Capital gave this analogy to whether he thinks this third attempt will work: "Third Time's a Charm?  More Likely to See Strike Three," and he added "We believe that this deal is 'dead on arrival' for the regulators." Mobilicity is currently under court protection from its creditors - looking for a buyer since last September.  According to a press release, Mobilicity and its Chief Restructuring Officer William Aziz declared "six organizations submitted participating materials and five bids were received...[and TELUS was] determined to be an acceptable transaction."  Their current offer is $350 million, which is down from their last offer of $380 million last June, but is still the highest bid.  Mobilicity still has about 165,000 active customers and because they and TELUS are both using the HSPA network, they should be able to effortlessly absorb their users. William Aziz, Mobilicity's Chief Restructuring Officer, stated "I am confident the Transaction will serve the best interests of Mobilicity's customers and employees."

TELUS put a new article on their blog, entitled, "TELUS to acquire Mobilicity - what it means."  They claim that they have entered into an agreement with Mobilicity to acquire them, as though it is done deal.  It goes through the history of their bid/deal offers, and this is really the best option for both parties.  They say that the strength of TELUS would allow 'Mobilicity's business to go forward in a way that's sustainable and would benefit their customers and employees.'  However, this agreement still has to go through all of the procedures for approval. It certainly seems that it makes the best sense for the customers - no new devices would be required, simply a seamless transfer from Mobilicity to TELUS.  From an employee standpoint, TELUS agreed to retain all 150 employees through the integration and to give them all a chance to become a permanent employee.  As far as the overall impact to Canada's wireless industry, TELUS said that Mobilicity accounts for less than 1-percent of Canada's 27 million mobile subscribers and argues that there is already plenty of choices for Canadian subscribers.

The ball is in the Industry Minister's court as Mobilicity and both its customers and creditors await their decision. While we can understand the government 's argument regarding competition, they also need to think of what is best for all parties involved. Please let us know on our Google+ Page what you think of this deal - should the government continue to interfere and prevent this merger, especially since Mobilicity is under protection from its always, we would love to hear from you.

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Cory McNutt

Senior Writer
Cory has written for Androidheadlines since 2013 and is a Senior Writer for the site. Cory has a background in Accounting and Finance and worked for the FBI in the past. From there he pursued his Masters in English Literature. Cory loves Android and Google related technology and specializes in Smartphone Comparisons on our site. Contact him at [email protected]