Canadian telecom operator Bell will divest 50 percent stake in wireless retailer GLENTEL to rival Rogers Communications.
With this, GLENTEL will become a 50:50 joint venture between Bell and Rogers which earlier threatened to block Bell’s ambitious plan to buy 100 percent stake in GLENTEL for an enterprise value of $670 million.
As per the new deal, Rogers will pay in cash to Bell 50 percent of the GLENTEL transaction value following the successful closing of Bell’s GLENTEL acquisition. In addition, Rogers Communications has also decided to withdraw its application for an injunction to block the acquisition of GLENTEL by Bell. The acquisition of the retail business was announced last month.
Bell will acquire GLENTEL’s approximately 22.4 million shares for approximately $594 million. The total enterprise value of GLENTEL is approximately $670 million including net debt and minority interest of approximately $78 million.
“Providing continued access to GLENTEL’s wireless retail operations for both competitors, this deal reduces Bell’s cost to acquire GLENTEL and helps ensure the transaction closes as scheduled to the benefit of GLENTEL shareholders,” said George Cope , president and CEO of Bell Canada.
GLENTEL will continue with its strategy of offering competing dual-carrier wireless brands to Canadian consumers and business customers.