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BCE to buy Manitoba Telecom in C$3.1 billion deal
George Cope, President and Chief Executive Officer of BCE, addresses shareholders at the company's Annual General Meeting, in Toronto April 30, 2015.
Reuters/Fred Thornhill
Canadian telecom and media company BCE Inc (BCE.TO) said it would buy Manitoba Telecom Services Inc (MBT.TO) for about C$3.1 billion ($2.5 billion) to expand in the western Canadian province.
Canada's biggest telecom companies - BCE, Rogers Communications Inc (RCIb.TO) and Telus Corp (T.TO) - are locked in an intense battle to increase their share of the wireless market.
BCE will pay C$40 per share, representing a premium of 22 percent to Manitoba Telecom's Friday closing.
Montreal-based BCE will also assume the company's outstanding debt of about C$800 million.
BCE said it would divest about one-third of Manitoba Telecom's postpaid wireless subscribers to Telus Corp (T.TO) following the completion of the deal.
BCE, which is known as Bell to its customers, also said on Monday it plans to invest C$1 billion over five years after the transaction closes to expand its broadband networks and services in Manitoba.
Manitoba Telecom shareholders will have a choice of receiving C$40 in cash or 0.6756 of a BCE share for each share held.
BCE said it would pay 55 percent of the purchase price in stock and the remainder in cash.
BCE will fund the cash component internally and will issue about 28 million shares for the deal.
BCE said last Thursday it added nearly 26,000 postpaid wireless customers in the first quarter, helping it post a better-than-expected profit.
Toronto-based Rogers added 14,000 in the same period.
Telus, which is based in Vancouver, is due to report results on Thursday.
($1 = 1.2517 Canadian dollars)
(Reporting by Arathy S Nair in Bengaluru; Editing by Maju Samuel and Saumyadeb Chakrabarty)
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