Freedom founder taps Telus to sweeten bid

Fate of wireless business central issue holding up Rogers’ Shaw acquisition

Anthony Lacavera, the founder and one-time CEO of the company that became Freedom Mobile, is sweetening his offer to acquire the wireless business by teaming up with Telus on a network-sharing agreement.

The fate of the Freedom Mobile wireless business is the central issue holding up Rogers’ $26-billion deal to acquire Shaw after the Competition Bureau went to court last week to block the deal.

The bureau said Rogers had proposed certain divestitures of Shaw’s wireless assets but they did not go far enough to prevent a steep decline in competition in the cellular market.

While Pierre-Karl Péladeau’s Quebecor has emerged as a potential leading candidate to scoop up the assets, Lacavera said he hopes the arrangement with Telus will prove he’s put together an offer that makes financial sense and will benefit Canadian wireless customers.

“This puts us in a position where we check every box for the government and Rogers,” Lacavera said in an interview with the Star, adding, “I think this agreement puts us on a level playing field with Quebecor.”

Lacavera’s investment firm Globalive Capital has offered $3.75-billion for Freedom Mobile, an offer he said that still stands. He said it is backed by a syndicate of mostly U.S. investors including Twin Point Capital and Baupost Group.

Lacavera said his group has been talking with Rogers but that Globalive declined to sign a nondisclosure agreement to join an earlier process to consider potential buyers for Shaw’s wireless assets.

Globalive announced the agreement with Telus on Thursday morning and Lacavera said if his bid succeeds, Freedom Mobile and Telus would be able to share network infrastructure, such as cell towers. They could also combine spectrum — the airwaves that carry wireless signals — in the areas where Freedom operates.

“Think of (spectrum) as a highway,” he said. “Telus has a six-lane highway, Freedom has a three-lane highway. Put them together there’s a nine-lane highway, and now all customers get the benefit of that nine-lane highway.”

Freedom Mobile, which offers service in Ontario, British Columbia and Alberta, has helped bring wireless prices down and spurred the introduction of consumerfriendly features such as unlimited data.

Lacavera and his business partners founded Wind Mobile in 2008 and, after a number of regulatory and operational setbacks, Shaw bought the company in 2016 and later renamed it Freedom Mobile.

Rogers and Calgary-based Shaw announced their landmark deal in March 2021, after years of speculation that the companies would combine their cable assets.

The Canadian Radio-television and Telecommunications Commission has approved the transfer of Shaw’s broadcast assets to Rogers, but the deal still requires approval from the federal department of Innovation and the Competition Bureau, both of which are focused on how the deal would affect the wireless market.

The bureau is seeking an injunction that would temporarily block Rogers and Shaw from closing their deal. The Competition Tribunal has scheduled a hearing on that matter for June 29 and 30. Rogers and Shaw must file their responses to the bureau’s court filing on the injunction by the end of May.

The Competition Bureau has said it is still open to a settlement of its court case to block the merger, but indicated in legal filings that it wants a buyer for the wireless assets that has sufficient cash and operating experience to keep the pressure on the big three, Rogers, Telus and Bell.

The bureau further said that bundling wireless service with home internet and TV is important, but Lacavera downplayed its importance. He said a stand-alone wireless player can be just as competitive, pointing to the example of TMobile in the U.S., which has not traditionally operated a home internet or TV business.

Telus spokesperson Richard Gilhooley did not offer any further details on the agreement but said the company has long provided network access to organizations “looking to obtain bulk access to network services at wholesale rates.”

Globalive did not disclose the economic terms of its agreement with Telus, which also has a separate network-sharing agreement with Bell.

Thi s puts us in a position where we check every box for the government and Rogers. I think this agreement puts us on a level playing field with Quebecor. ANTHONY LACAVER GLOBALIVE CAPITAL