Court gives OK to Look Communications asset sale

Look Communications has received the blessing of an Ontario court for the sale of its wireless spectrum and other assets. Now it will see if the strategy of a controlled sale will work.

Buyers have only 17 business days to make up their minds if they want to place a closed offer on some or all of the Markham, Ont.’s, service providers assets, which include the wireless broadcast licence it uses to transmit TV signals to subscribers, some 90 Mhz of wireless spectrum, a network between Toronto and Montreal delivering Internet service and about $300 million in tax losses. There will be no competitive bidding.

Offers have to be in by noon Feb. 16. Then, with the advice of an accountant, Look will decide which of any it will accept.

The publicly-traded company, headed by leading shareholder, vice-chair and CEO Gerald McGoey, decided in December it had to sell assets this way in the face of a dropping share price and spectrum it couldn’t afford to exploit.

Look is controlled by Unique Broadband Systems Inc., whose major shareholder is McGoey.

At a shareholder’s meeting last week some 94 per cent of Look’s shareholders voted in favour of the proposal, although, McGoey said, Telus voted against. With that vote an Ontario court Wednesday ratified the sale plan.

An accounting firm is now authorized to send detailed asset information to potential buyers. Since Look announced its plan McGoey has fielded a number of calls about the assets. “Whether they’re serious or not, I guess we’ll know on the 16th [next month].”

Phone queries are not something Look has been lacking over the years. McGoey says potential asset buyers have until now been scared off by the possibility that once a bid goes to the Look board and becomes public, another buyer can make a counter-bid.

The closed-bid asset sale he has come up with is a way of getting around that.

Just as importantly, the company has made it clear that cash isn’t the only currency it’s willing to deal with. It’s willing to take convertible debt or shares in another company so it can partner in exploiting the spectrum or broadcast licence.

Potential buyers can offer to buy all or parts of the spectrum.

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