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Mobilicty in Takeover Bid Talks with Quebecor

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Quebec telecom operator Quebecor has reportedly expressed an interest in buying the struggling mobile network operator, Mobilicty.

Scotiabank analyst Jeff Fan wrote in a research note that Quebecor has signed a non-disclosure agreement with Mobilicity as it gets a look at the company's accounts and ponders a takeover bid.

For Quebecor, which also owns the Vidéotron mobile network, this would be its first significant move outside its French-speaking home market.

Mobilicity has operations in Toronto, Ottawa, Calgary, Edmonton and Vancouver, but is also under bankruptcy protection as it seeks a buyer to pay off its debts. Previous attempts by the larger networks to buy it were blocked by the government.

The talks could indicate that Quebecor is looking to become a national telecoms operator, and such a move is likely to be supported by the government which is keen to see a fourth major player in the market to challenge the current big-three networks.

"The most important potential twist could be that Quebecor-Videotron may pursue licences outside Quebec for opportunistic and financial reasons," Fan said in the research note.

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Tags: quebecor  mobilicty  Canada