BCE acquiring Glentel for C$594m in cash and stock deal
Montreal-based telecommunications company BCE Inc. announced on Friday it is acquiring Burnaby-based multi-carrier mobile products distributor Glentel Inc. for approximately C$594 million ($520 million) in a cash and stock deal.
BCE, which trades under the Bell brand, says the transaction strengthens its strategy to accelerate wireless and enhance customer service in a competitive wireless marketplace, while at the same time providing Glentel shareholders with additional value.
The acquisition was greeted with lackluster investor enthusiasm. By mid-morning on Friday BCE shares were 0.9% up at C$53.79. Glentel’s shares, on the other hand, rose by more than 100% to C$25.96.
BCE will purchase all of Glentel’s 22.4 million fully diluted common shares, for about C$594 million. Glentel stockholders can opt to either receive $26.50 in cash per Glentel share, or 0.4974 of a common BCE share.
The acquisition is seen as a defensive move, aimed at securing Bell’s long-term distribution capabilities.
President and CEO of BCE Inc. and Bell Canada, George Cope, said:
“Glentel is a remarkable Canadian success story, and over the past 25 years has been influential in driving the widespread adoption of mobile services in Canada, the United States and elsewhere internationally. As our longstanding partner, the Glentel team shares Bell’s commitment to wireless growth and service innovation, and we are proud to welcome them. Glentel’s national reach, deep product knowledge, and great customer service and sales execution are key to our strategy to accelerate wireless.”
Glentel has 494 stores across Canada that sell products and services from Virgin Mobile, SaskTel, Rogers Wireless, Fido, Chatr, and Bell Mobility. Following the acquisition, it plans to continue selling its products from multiple carriers.
Glentel also owns, operates and franchises more than 735 retail outlets in the United States, as well as 147 points of sale in the Philippines and Australia.
Tom Skidmore, Glentel President and CEO, said:
“As Glentel considered its future opportunities, it was essential that our partner share in Glentel’s core values of Quality, Service and Integrity. Bell, who has been a long time significant contributor to Glentel’s success, is that partner. We are delighted that Glentel, together with Bell, will continue to deliver legendary customer service to its customers, and believe that this new relationship will provide additional value to our shareholders and employees.”
BCE is in the middle of a market share war against Telus Corp and Rogers Communications Inc., plus a number of regional competitors.