Owners of Wind Mobile put wireless carrier up for sale
July deadline set for receipt of final offers
Canada’s fourth-largest wireless carrier, Wind Mobile, is being put up for sale by its Dutch owner, VimpelCom Ltd., and Wind founder Anthony Lacavera and his original partner could be among the bidders. In a note to investors Thursday, Ca- naccord Genuity Canadian research head Dvai Ghose said VimpelCom has started a process to sell Wind Mobile. The Toronto-based company was launched in December 2009 following Ottawa’s 2008 auction of wireless spectrum aimed at attracting new entrants to compete with the country’s incumbent telecom giants. Wind has grown its subscriber base but its parent has also wracked up loan charges.
Analysts say it may have lost the appetite to pour more cash into the company. Ghose said formal bids will be accepted starting Friday and a source close to the situation said a July deadline has been set for receipt of final offers expected to range between $500 million and $1 billion. The source said bidders could include Lacavera, who in January said he would relinquish the CEO role and transfer his ownership stake to VimpelCom. The company owns Wind financial backer Orascom Telecom Holding SAE and was able to up its Wind holding under newly eased foreign ownership rules. The source said Lacavera could team with Egyptian telecom billionaire Naguib Sawiris’s Accelero Capita. Sawiris was executive chairman of Wind Telecom and Orascom before turning to politics. Toronto’s Fairfax Financial Holdings Ltd., an investor in smartphone maker BlackBerry, could also table a bid for Wind, along with debt holders of rival telecom up- start Mobilicity.
The source said Toronto-based Rogers Communications Inc. has considered the purchase, but noted that any offer would be problematic given Canadian regulators’ desire for at least four separate wireless carriers. Ottawa aims to promote price competition and ease the market dominance in Canada’s $19billion wireless market of Rogers, Bell and Telus.
“While a potential VimpelCom sale of its ownership of Wind Mobile Canada would come as no surprise, given Wind’s challenges in Canada and VimpelCom’s focus on free cash flow, debt deleveraging and emerging markets, we were surprised to hear that a formal sale process is underway with initial bids due tomorrow,” Ghose wrote.
“We estimate that VimpelCom/ Orascom has invested approximately $1.7 billion into Wind Mobile Canada to date including $442million for their AWS spectrum.”
The company’s chief executive officer, Jo Olav Lunder, told analysts on it most recent earnings call that he is mulling options for Wind.