Canada’s largest telecom company, BCE Inc, will acquire the mobile phone retailer Glentel Inc for around $594 million in cash and stock.
BCE, which operates under the Bell brand, will acquire all of Glentel’s approximately 22.4 million common shares. Glentel’s shareholders will receive $26.50 per share or 0.4974 of a common BCE share.
The company is trying to gain market share to compete with its two main rivals Rogers Communications Inc and Telus Corp.
Desjardins analyst Maher Yaghi wrote in a note:
“We like the acquisition as it is a defensive move that secures Bell’s long-term distribution capabilities and solidifies its important retail presence in Canada,”
Glentel, based in Burnaby BC, is a multi-carrier mobile products distributor. It sells mobile phones under the WirelessWave/Wave Sans Fil, Tbooth wireless and WIRELESS etc. banners in 494 stores across Canada.
The company currently offers wireless plans from Bell, Rogers, Virgin Mobile, Fido, and Chatr.
On Friday morning Glentel’s shares surged by 103.6% to $25.96, with BCE shares only up 0.9% to $53.79.
