For Shaw, Freedom seen as better play than ViaWest

Shaw Communications Inc. hasn’t confirmed reports that it’s looking for a buyer for ViaWest, its data centre business, but analysts are a fan of the idea as a way to fund its wireless business.

The cable company ’s stock price bumped upwards after Reuters reported Friday that it was looking to sell ViaWest, the owner and operator of 30 data centres in the U.S. and Calgary that Shaw purchased for US$1.2 billion in 2014. The stock was trading 0.69 per cent higher on Monday to $29.14 on the Toronto Stock Exchange.

Shaw would not verify the accuracy of the report. “We do not comment on rumours or speculation,” a spokesperson said Monday. But analysts estimate Shaw could pull in anywhere from $1.4 billion to $2 billion if it sold the assets.

“It would make strong strategic sense for Shaw to redeploy the capital to fund Freedom Mobile’s network investment/expansion,” Barclays analyst Phillip Huang wrote in a note to clients Monday.

ViaWest was a good investment for Shaw, especially since it was bought when the Canadian and U.S. dollars were at parity, Huang wrote, but it has no synergies with the core Canadian cable business.

“Freedom now clearly represents the bigger opportunity,” he wrote.

Analysts weren’t surprised by the reports, as they’ve been floating the idea of a sale for months as a way to provide much-needed capital for Freedom.

“Capital will be needed to improve network quality and reach as well as to acquire additional spectrum and subsidize handsets, while focus will be needed to avoid traps in a project where operational risk is omnipresent,” Desjardins’ Maher Yaghi wrote in a note Monday.