The man with the biggest grin in the Canadian wireless scene could be VimpelCom Ltd. CEO Jo Lunder, who could be entertaining three bids for its Canadian Wind Mobile unit.
According to the Globe and Mail, Rogers Communications is putting up some of the money to support Birch Hill Equity Partners Management’s attempt to buy Wind. What Rogers would gain is a deal sharing Wind’s spectrum, while Wind would get some revenue.
To ensure it doesn’t fall offside on the federal government’s preference that incumbent carriers like Rogers don’t get control of a new entrant’s spectrum, Rogers wouldn’t have an equity share in Wind.
This could mean that Birch Hill is a serious negotiator against Verizon Communications in the fight for Wind, which would push up the value of the Toronto-based startup. VimpleCom and its Orascom Telecom Holdings division, which originally backed Wind in 2008, have put close to $1 billion into Wind including $442 million for its spectrum alone.
Wind isn’t core to VimpelCom’s future plans and has been shopping the division around.
(Wind chair Anthony Lacavera at 2013 Canadian Telecom Summit
Wind’s chairman and CEO Anthony Lacavera has said he and Orascom founder Naguib Sawiris would like to make a private bid for Wind. It was thought that would become serious when an investment firm co-founded by Sawiris’ bought the Allstream division of Manitoba Telecom Services (MTS) in May.
Meanwhile financially-troubled startup Mobilicity could also be bought and merged with Wind by either Birch Hill or Verizon if the parties can strike a deal with debt holders.
The outcome of this dealing could be revealed next week. According to the National Post
, VimpleCom’s board of directors meets next week in advance of the Aug. 7 release of the company’s Q2 financials, when it could deal with offers for Wind.
Word that Rogers has offered to back Birch Hill’s bid was immediately denounced by the Consumers Association of Canada and the Public Interest Advocacy Centre (PIAC). In a news release the partnership was called “a sign of desperation in the ranks of Canada’s big three wireless carriers.”
“Bell, TELUS and now Rogers are trying anything to keep the new entrants from being bought by Verizon and facing effective wireless competition” John Lawford, PIAC executive director, said in the release. He noted that the Canadian government has been clear that it wants more wireless competition but complained the big three are “filing lawsuits, running media blitzes on their own extensive broadcasters and questionable behind the scenes deals to derail the chance for consumers to have four real wireless carriers across the country.”