Canada’s BCE to buy local mobile phone retailer Glentel for $586 mn

BCE Inc, (better known by its brand name Bell), Canada's largest communications company, yesterday struck a deal to buy local mobile phone retailer Glentel, in a C$670 million ($586 million) deal.

Under the deal, which has been approved by the board of both companies, BCE will pay Glentel about C$26.50 per share in a combination of cash and BCE shares, a premium of 108 per cent to Glentel closing share price on the TSX on 27 November.

BCE said that Glentel shareholders can choose to receive either $26.50 in cash or 0.4974 of BCE share for each Glentel share.

BCE will issue about 5.6 million shares to help fund the purchase, which includes C$78 million for net debt and minority interest.

The agreement includes a non-solicitation covenant on the part of Glentel and gives Bell the right to match any superior proposal. If Bell does not exercise its right to match, Bell would receive a termination fee of $33.6 million if Glentel opts for a superior proposal.

The agreement also includes Bell to pay a break-up fee of $33.6 million to Glentel if the deal does not close for regulatory reasons.

Based in British Columbia, Glentel operates 494 retail locations across Canada offering wireless products and services from Bell Mobility, Chatr, Fido, Rogers Wireless, SaskTel and Virgin Mobile, and plans to continue offering products from multiple carriers following the acquisition.

Outside Canada, Glentel owns, operates, and franchises approximately 735 retail locations in the US, as well as 147 points of sale in Australia and the Philippines.

"Glentel is a remarkable Canadian success story, and over the past 25 years has been influential in driving the widespread adoption of mobile services in Canada, the US and elsewhere internationally. As our longstanding partner, the Glentel team shares Bell's commitment to wireless growth and service innovation, and we are proud to welcome them," said George Cope, president and CEO of BCE and Bell Canada.

With 2013 revenues of C$20.4 billion, Montreal-based BCE is Canada's largest communications company, providing broadband communication services through Bell Canada and Bell Aliant brands.

Bell Media is Canada's biggest multimedia company with assets in television, radio, out of home and digital media, including CTV, Canada's #1 television network, and the country's most-watched specialty channels.