Canada’s largest mobile operator, Rogers Communications Inc (RCIb.TO), has agreed to pay more than $400 million to acquire struggling wireless carrier Mobilicity, two sources with knowledge of the matter said on Tuesday.
The deal includes the sale of spectrum covering the Ottawa region and eastern Ontario to Wind Mobile, another small operator, for a yet-to-be-determined price, the sources said.
The agreement will be brought before a court overseeing Mobilicity’s creditor protection process on Wednesday for approval, the sources said. The sources could not speak on the record because the process is not public.
The secondary deal to sell airwaves is considered necessary in order to win approval from the federal government. Canada had previously blocked takeover offers for Mobilicity from Telus Corp (T.TO), another major wireless operator which was also actively bidding for the asset in the last week.
Mobilicity, under creditor protection since September 2013, declined to comment. Rogers was not immediately available to comment.
Mobilicity’s private equity investors include U.S.-based Quadrangle Group and Canada’s Catalyst Capital Group.
By Alastair Sharp and Euan Rocha
(Editing by Jeffrey Hodgson, Bernard Orr)
(This story has been edited by Kirk Falconer, editor of peHUB Canada)
Photo courtesy of Reuters/Mark Blinch