Canadian telco Manitoba Telecom Services (MTS) has reportedly stepped up efforts to sell its subsidiary MTS Allstream in anticipation of the expected relaxation of Canadian foreign investment laws. The Globe and Mail wrote that MTS has hired Morgan…
Canadian telco Manitoba Telecom Services (MTS) has reportedly stepped up efforts to sell its subsidiary MTS Allstream in anticipation of the expected relaxation of Canadian foreign investment laws. The Globe and Mail wrote that MTS has hired Morgan Stanley to sell the operator to an international buyer.
MTS was already working with CIBC, but a Canadian acquirer for Allstream could not be found. Morgan Stanley has been retained to look for buyers outside Canada, probably from the US, the report says.
The move comes ahead of a proposed relaxation of foreign ownership rules put forward by the Harper government and expected to be approved later in the summer.
The planned change to the telecommunications act will mean companies with 10% or less market share by revenue will have restrictions limiting foreign ownership lifted.
At the moment non-Canadians are allowed to own a maximum of 20% of the voting shares in telcos and are restricted to indirect control of 46.7%.
Last month in a conference call MTS CEO Pierre Blouin said the proposed changes opened up “strategic alternatives” for Allstream.
“There is no doubt that there is a lot of interest outside of the country in what’s happening in Canada in terms of relaxing foreign investment restrictions,” Blouin said.
MTS are seeking a sale price in excess of C$500m (US$488.54m) according to the report, though it cites sources familiar with the assets suggesting most potential buyers value Allstream at a significantly lower price, probably at C$400m (US$391.36m) or lower.
MTS were not available for comment before the press deadline.
