BCE looks to strengthen its presence with $3.1-billion Manitoba Telecom purchase

BCE Inc. (TSE:BCE, Mkt cap 51.55B, P/E 18.69, Div/yield 0.68/4.62, EPS 3.16, Shares 868.62M) says acquiring Manitoba Telecom Services Inc. for about $3.1 billion (US$2.5 billion) in cash and stock will provide its communications subsidiary Bell with additional growth opportunities.

BCE Manitoba Telecom purchase

BCE looks to strengthen its presence with $3.1-billion Manitoba Telecom purchase

Canada’s biggest telecommunications company will acquire Manitoba Telecom for C$40 a share, extending its presence westward and further consolidating the country’s wireless market, Bloomberg reports.

The purchase, which is reported to be worth $3.9 billion including debt, gives BCE a greater presence in central Canada – an area where rivals Telus Corp. and Rogers Communications Inc. currently reign supreme.

It also sees BCE continue its years-long acquisition spree, having acquired retail distributors the Source and Glentel, broadcaster CTV, an interest in Maple Leaf Sports and Entertainment, and Astral Media in the last eight years.

It was also part of an investor group that acquired Q9 data centres and, in 2014, it took Bell Aliant private in a transaction worth almost $4 billion.

However, the proposed purchase of Winnipeg-based MTS will first have to tick all the questions posed of it by the new Canadian government, which knows full-well that green lighting the deal would set a significant precedent.

The previous Conservative government was determined to strengthen smaller players like Manitoba Telecom, Mobilicity and Wind Mobile and tried to establish four strong competitors in each market in order to do so.

It also blocked repeated attempts by Telus to buy Mobilicity and sold wireless spectrum to smaller players at a subsidized price.

BCE Chief Executive Officer George Cope said on a conference call with BCE and MTE executives that his company will work with government officials over the next nine months “to meet what requirements they have or don’t have.”

BCE Inc. is a Verdun QC based communications company. The Company provides residential, business and wholesale customers with a range of solutions to all their communications needs, including wireless, high-speed Internet, Internet protocol television (IPTV) and satellite TV, business Internet protocol (IP) broadband, and information and communications technology (ICT) services. The Company’s segments include Bell Wireless, Bell Wireline and Bell Media. The Company’s Bell Wireless segment provides wireless services that are available to virtually all of the Canadian population. The Bell Wireline segment includes voice and data network; high-speed fiber deployment, and bell direct to home (DTH) satellite television service. The Company’s Bell Media segment offers specialty and pay television, radio, digital media and out-of-home advertising. The Company, through Bell media, operates approximately 110 radio stations in over 50 markets across Canada. More from Reuters » 

What is Successful Investing? Learn more here>>

Download Our Free Special Report – How to Hunt For Value Stocks. Michael Sprung will share with you 5 stocks set for long-term gains here>>

We believe that investment management is about managing risk, not chasing speculative returns. Like to learn more? Please contact us here>>

The opinions expressed here are ours alone. They are provided for information purposes only and are not tailored to the needs of any particular individual or company, are not an endorsement, recommendation, or sponsorship of any entity or security, and do not constitute investment advice. We strongly recommend that you seek advice from a qualified investment advisor before making any investment decision.


Comments are closed.