Deep-pocketed British Columbia First Nations, a major pension plan and an infrastructure fund have teamed up with the owner of the Vancouver Canucks to bid for Freedom Mobile as Rogers Communications Inc. RCI-B-T scrambles to find a buyer for the country’s fourth-largest cellphone company.
The $10-billion LiUNA Pension Fund of Central and Eastern Canada, along with Musqueam Capital Corp., the Tsleil-Waututh Nation and infrastructure investor Fengate Asset Management, which manages $6-billion, made an offer for Freedom and presented it last week to federal government officials for approval, according to sources working on the acquisition. The Globe and Mail is not identifying the sources because they are not authorized to speak for the consortium.
The group also includes Vancouver-based Aquilini Equities, an arm of the billionaire Aquilini family’s empire, which owns the NHL team and its home – Rogers Arena – plus real estate, technology and agriculture businesses.
Rogers is attempting to buy Freedom owner Shaw Communications Inc. SJR-B-T for $26-billion, and must sell its wireless division for the federal Competition Bureau and Department of Innovation, Science and Economic Development (ISED) to approve the takeover. Last Friday, the bureau made an application to block the Shaw deal on the grounds it would reduce competition in the wireless market, which it called an “essential service.”
Freedom is expected to fetch up to $4-billion, with rural internet provider Xplornet Communications Inc. and Quebecor Inc. QBR-B-T also in talks for the business. Rogers, Shaw and all the potential buyers are trying to determine what the competition watchdog and ISED want from the next owner of Freedom.
In its presentation to federal officials, the LiUNA consortium highlighted the deep pockets and telecom expertise of its members. The government has said it wants an experienced telecom owner for Freedom, which has 2.1 million customers in B.C., Alberta and Ontario, and posted sales of $655-million in the first six months of the fiscal year.
Over the past two years, Toronto-based Fengate, backed in part by LiUNA, acquired a network of telecom towers that covers nine U.S. states. The company has a two-decade track record as an infrastructure owner, and also invests in real estate and private equity.
Musqueam Capital is the economic development arm of the Musqueam Indian Band, and its holdings include a stake in MST Development Corp., which owns six properties in Vancouver valued at more than $1-billion. The Tsleil-Waututh are also partners in MST Development.
The federal Liberals have been backing Indigenous businesses as part of their reconciliation initiative. In April, ISED Minister François-Philippe Champagne announced a series of grants under the Indigenous intellectual property program.
Musqueam Capital and the Tsleil-Waututh are also partners with Aquilini’s real estate company on a 40-acre property in Burnaby, B.C.
Rogers’ ties to the Aquilini family date back to 2009, when Rogers vice-chair Phil Lind negotiated new naming rights on the Canucks’ home with Francesco Aquilini, chairman of the Canucks and one of three brothers who run the family’s holdings, worth an estimated $3-billion. Aquilini family-owned GM Place became Rogers Arena in 2010.
Rogers, Shaw and members of the consortium all declined to comment on the Freedom sale process. Bankers advising on the process said all bidders sign a non-disclosure agreement.
Other potential Freedom owners include New Brunswick-based Xplornet and its backer, New York-based private equity firm Stonepeak Infrastructure Partners. Stonepeak owns U.S. fiber optic networks and telecom towers, and recently raised a US$14-billion fund to acquire new businesses.
Montreal-based Quebecor has successfully bundled its wireless, cable and media businesses and become a significant player in the Quebec cell phone market. Chief executive officer Pierre Karl Péladeau has made clear his interest in acquiring Freedom and building a national wireless network since the Shaw takeover was announced in March, 2021. However, Rogers has only initiated talks with Quebecor in recent weeks, The Globe has reported.
Quebecor has a $6.8-billion market capitalization and relatively little debt on its balance sheet compared to rivals such as Rogers, and analysts say Mr. Péladeau has the capital needed to acquire Freedom, if given the opportunity.
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