Amsterdam-based Vimpelcom has hired UBS to sell Canadian operator Wind Mobile, according to The Globe and Mail which cited unnamed sources.
The report followed a note from Canaccord Genuity analyst Dvai Ghose. He referred to several sources that said a…
Amsterdam-based Vimpelcom has hired UBS to sell Canadian operator Wind Mobile, according to The Globe and Mail which cited unnamed sources.
The report followed a note from Canaccord Genuity analyst Dvai Ghose. He referred to several sources that said a formal sale process is underway and that initial bids are due today, 22 March.
Wind CEO Anthony Lacavera’s holding company, AAL Corp, and Egyptian financier Naguib Sawiris’ firm Accelero Capital are mulling a bid and have secured additional financing, the newspaper said citing a person close to the situation. The report added that the operator could fetch anywhere between US$500m and US$1bn.
Lacavera sold his stake in the challenger to Vimpelcom in January and said he would resign as CEO once that sale was complete.
Vimpelcom now holds 99.3% of Wind via subsidiary Orascom Telecom Holding. It increased its stake following the liberalisation of Canada’s foreign investment law that now allows international investors to fully-own telcos with 10% market share or less.
Vimpelcom has held informal talks with a number of strategic buyers including incumbent Rogers, The Globe and Mail’s sources said.
Vimpelcom declined to comment on the reports, but earlier this month its CEO Jo Lunder said the company had decided to take over Wind so it could decide its own destiny in Canada. The deal would create options, he said at the time, which would allow Vimpelcom to pursue what it believes would be in the best interests of shareholders.
“We can decide to exit; we can decide to do an in-market merger and consolidate; we can decide to grow organically in the country,” Lunder said. “We will test the different options available”.
In his note Canaccord’s Ghose suggested that it was unlikely the government would give regulatory approval to one of Canada’s three dominant players – Bell, Rogers and Telus – to buy Wind, unless all other avenues had been exhausted.
He also questioned whether or not Sawiris’ Accelero had the funds to make the acquisition and then to purchase frequencies in the 4G auction later this year and build-out LTE. To then pursue a consolidation strategy buying up other smaller players – long-mooted in the Canadian market – would require even more capital.
Ghose suggested that Canada’s wireless incumbents would welcome Accelero buying Wind, if only because it would prevent a large foreign telco such as AT&T, Verizon or Vodafone purchasing the operator.
In February Canada’s industry minister Christian Paradis encouraged international telcos to invest in his country’s wireless market.
Paradis said smaller operators needed fresh capital to keep the sector competitive, adding that there should be four players in each of Canada’s regions.
Wind began offering services in Canada in 2009 after buying spectrum the previous year. It was primarily financed by Sawiris’ Orascom, subsequently bought by Vimpelcom, through a complex structure that got around Canada’s foreign investment laws at the time, much to the ire of rival operators Telus and Public Mobile. As of January 2013 Wind has 600,000 subscribers. Bell, Rogers and Telus together have more than 24 million subscribers, according to the Convergence Consulting Group.
