An Ontario judge has granted court approval of Telus Corp.’s $380-million proposed acquisition of struggling wireless carrier Mobilicity.
Justice Colin Campbell of the Ontario Superior Court of Justice said Tuesday that he would endorse an order supporting the controversial deal – an initial hurdle the companies needed to clear before obtaining regulatory approvals from the federal government and the Competition Bureau.
“I’ll sign it,” Justice Campbell told the court, adding he would issue written reasons for his order “in due course.”
The judge’s order followed last-minute negotiations between the various stakeholders on revisions to the Telus plan and the final wording of the court order.
Still, obtaining court approval of the proposed transaction is just an incremental step in a larger approvals process – with the real test being whether Industry Minister Christian Paradis will sign off on the deal.
Doing so would require the Conservative government to make a key exception to a rule barring big carriers like Telus from acquiring new-entrant licences until next year. But given Mobilicity’s pressing financial problems, both companies are pushing for fast-tracked approvals that would allow for a quick transfer of assets to Telus.
Mobilicity, which is legally known as Data & Audio-Visual Enterprises Holdings Inc., has been suffering “financial challenges” and its board has been trying to find a workable solution since the summer of 2012, the court heard.
As a result, the Telus transaction is “the best possible solution” for the upstart carrier, Mobilicity’s lawyer, Orestes Pasparakis told the court.
The deal was also being supported by the Catalyst Capital Group Inc., one of Mobilicity’s largest bond holders. Catalyst, however, had previously raised concerns about certain financial details of the transaction.
“The court approval of the plan of arrangement for the Telus acquisition marks an important milestone for us,” said Stewart Lyons, Mobilicity’s president and chief operating officer, in a release.
“We will continue to work with Telus to expedite the approval process of an acquisition that is in the best interests of our customers, employees and other stakeholders.”