Glentel (TSX: GLN, Stock Forum) took a rocket ride in the market today when the company announced that it had entered into a definitive agreement with BCE (TSX: BCE, Stock Forum) where BCE would acquire all of the issued and outstanding shares in the company.
According to the news release, the deal, valued at approximately $670.0 million, is part of Bell's strategy to accelerate wireless and improve customer service in a competitve mobile marketplace.
Company shareholders are expected to receive $26.50 per share in a combination of cash and BCE shares which represents a 121% premium on the 10-day volume weighted trading average share price of the company.
The company, headquartered in Burnaby, British Columbia, Canada, operates 494 retail operations across the country offering wireless services from Bell Mobility, Chatr, Fido, Rogers Wireless, SaskTel and Virgin Mobile. It also owns, operates and franchises outside the country with approximately 735 retail locations in the United States, and 147 points of sale in Australia and the Phillipines.
The deal, unanimously approved by Glentel's board, provides for a non-solicitation covenant on the part of the company and is expected to close by the end of Q1 2015 based on the customary approvals.
BCE and Bell Canada President and CEO, George Cope, commented on the transaction, “GLENTEL is a remarkable Canadian success story, and over the past 25 years has been influential in driving the widespread adoption of mobile services in Canada, the United States and elsewhere internationally.”
He went on to explained, “As our longstanding partner, the GLENTEL team shares Bell's commitment to wireless growth and service innovation, and we are proud to welcome them. GLENTEL's national reach, deep product knowledge, and great customer service and sales execution are key to our strategy to accelerate wireless.”
Company President and CEO, Tom Skidmore, added, “As GLENTEL considered its future opportunities, it was essential that our partner share in GLENTEL's core values of Quality, Service and Integrity. Bell, who has been a long time significant contributor to GLENTEL's success, is that partner.”
Then he summed up, “We are delighted that GLENTEL, together with Bell, will continue to deliver legendary customer service to its customers, and believe that this new relationship will provide additional value to our shareholders and employees.”
Glentel was in the news recently when the company reported improved Q3 results at the beginning of November.
Shares soared 104.85% on the news to $26.12 per share.
Currently there are 22.3m outstanding shares with a market cap of $582.3 million.