Look Communications is being tight-lipped about the number and value of the bids it received this week for the wireless spectrum, network and other assets the Milton, Ont., service provider has put up for sale.
“They’ve got bids, they’re reviewing them and if and when there is a decision made to pursue any of them, then obviously then details will be released about that particular bid or bids,” company spokesman Peter Block said Tuesday.
Anxious to sell its assets, the company set up a controlled saleto see if it can do privately what it says it couldn’t do publicly – get value for the approximately 90 MHz of spectrum, a network between Toronto and Montreal delivering Internet service to some 30,000 subscribers and about $300 million in tax losses.
Bids closed Monday and are now being evaluated by a monitor, a court-approved accounting firm that will make recommendations to the Look board. Any transactions have to be approved by the courts.
There was no competitive bidding. Look CEO and vice-chairman Gerald McGoey said attempts to sell the assets failed in the past because potential buyers were afraid that when an offer was made public – as it had to because Look is publicly-traded on the Toronto Venture Exchange – competing offers would suddenly appear. That, he said, put a damper on buyers. Consequently, McGoey set up the closed bid process.
The company is a subsidiary of publicly-traded Unique Broadband Systems Inc. of Milton, Ont., of which McGoey is chairman and CEO. Look has been struggling for some time, with subscribers and revenue dropping. For the fiscal year ending Aug. 31, 2008, it recorded a $7.3 million loss on revenue of $20 million.
Look’s spectrum is in the 2.5-2.69Ghz range, some of which is used to deliver fixed wireless TV via WiMAX in the Toronto, Montreal and Ottawa areas. However, Industry Canada is willing to convert those licences to two-way mobile broadband, which could be attractive to someone wanting to offer advanced services to handset or laptop users.
Potentially, a sale of all assets would mean the liquidation of the company. However, McGoey has made it clear that cash isn’t the only currency he’s willing to deal with. Convertible debt or shares in another company, so Look can partner in exploiting the spectrum or broadcast licence, would be attractive to him.
It may take a few days before McGoey will comment on the quality of the bids, Block said. “The monitor may go back to any of the bidders for clarification if there are any questions or conditions that need clarified.”
Whether a deal can be inked will be the real measure of satisfaction, Block added. For his part, McGoey has suggested he isn’t in a hurry to grab any deal. Despite its losses, he said in an earlier interview, Look won’t sell any assets unless a bid is worthwhile.