Posted by: youngragingbull | June 4, 2013

Canadian government blocks Mobilicity sale to Telus

The Canadian federal government announced Tuesday that it will not allow the sale of mobile phone services provider Mobilicity to Telus, effectively killing the $380 million deal.

In a news conference in Ottawa, Industry Minister Christian Paradis said the deal could not be passed due to rules set in the 2009 spectrum auction that saw the birth of Mobilicity.

“Our government has been clear that spectrum set aside for new entrants was not intended to be transferred to incumbents” he said.

Under the rules of the 2009 auction, any new wireless carriers were prohibited from selling their spectrum to an incumbent within five years. That came into question last month when Telus emerged with a $380-million bid to take over Mobilicity.

“We will not waive this condition of licence and will not approve this, or any other transfer of set-aside spectrum to an incumbent [within the five-year limit],” he said.

Mobilicity chief executive Stewart Lyons said he was reviewing the minister’s announcement and will “be speaking with Telus and other stakeholders and will have more to say in due course.”

The deal had already passed numerous regulatory hurdles, including approval by Mobilicity’s bondholders, before Ottawa put its foot down.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Categories

%d bloggers like this: