TORONTO - BCE Inc, Canada's largest telecommunications company, said it would buy mobile phone retailer Glentel Inc for about $594 million in cash and stock.
The move was viewed as defensive in nature and greeted with muted investor enthusiasm, with BCE shares up 0.9% at $53.79 at midmorning on Friday.
BCE, which operates under the Bell brand, is fighting to win market share against the two other dominant national wireless providers, Rogers Communications Inc and Telus Corp, as well as regional rivals.
"We like the acquisition as it is a defensive move that secures Bell's long-term distribution capabilities and solidifies its important retail presence in Canada," Desjardins analyst Maher Yaghi wrote in a note.
Burnaby, British Colombia-based Glentel sells mobile phones under the WirelessWave/Wave Sans Fil, Tbooth wireless and WIRELESS etc. banners across 494 stores in Canada.
Glentel offers wireless plans from Bell as well as Rogers and its budget brands Fido and Chatr, SaskTel and Virgin Mobile.
Glentel also sells mobile phones in Australia, the Philippines and the United States.
Glentel's shareholders will receive $26.50 per share, more than double where the stock was trading just before the deal.
Glentel's shares jumped 103.6% to $25.96 on Friday morning.
Including debt and a minority interest, the deal is valued at about $670 million.
Canaccord Genuity was Glentel's financial adviser, while Owen Bird Law Corp was its legal adviser.
Blake, Cassels & Graydon LLP and Sullivan & Cromwell were Bell's legal advisers.