Globalive criticizes Freedom Mobile sale process as bidders circle

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Globalive Capital’s Anthony Lacavera is asking Ottawa to consider the sale process for wireless carrier Freedom Mobile a “non-competitive sham” as prospective bidders circle around the business, which is up for sale as part of Rogers Communications Inc.’s RCI-A-T takeover of Shaw Communications Inc SJR-A-X.

The Globe has reported that Rogers, which is seeking regulatory approval for its $26-billion takeover of Shaw, has presented Ottawa with a deal for rural internet provider Xplornet Communications Inc. to acquire Shaw’s Freedom Mobile.

However, other suitors, including Globalive, are still pursuing Canada’s fourth-largest wireless carrier, which has about two million customers in Ontario, B.C. and Alberta.

The Aquilini family, which owns the NHL’s Vancouver Canucks, is in talks with Rogers about acquiring Freedom, according to three sources familiar with the discussions. The Globe is not identifying the sources because they are not authorized to speak publicly about the matter.

The family has been speaking with banks to line up financing for Freedom, two of the sources said. The Aquilini family did not immediately respond to a request for comment.

Rogers has said that its takeover of Shaw, which still requires approval from the Competition Bureau and the Department of Innovation, Science and Economic Development, should close in the first half of the year. The companies’ deadline is June 13.

Globalive Capital ramping up efforts to buy Shaw Communications’ Freedom Mobile

Rogers deal would see Xplornet take over Freedom Mobile

The Vancouver-based Aquilini family has ties to Rogers that date back to 2009, when Rogers vice-chair Phil Lind met Francesco Aquilini, chairman of the Canucks and one of three brothers who run the family’s holdings in real estate, sports and hospitality. The holdings are worth an estimated $3-billion.

Mr. Lind negotiated new naming rights on the Canucks’ home – Aquilini-owned GM Place became Rogers Arena in 2010. In Mr. Lind’s 2018 autobiography, Right Hand Man, he said: “Francesco Aquilini is also a great friend. A true entrepreneur like his dad, Luigi, Francesco lives life to the fullest in B.C.”

In recent years, family-owned Aquilini Investment Group has moved from its roots in residential real estate into fields such as agriculture, vineyards, fish farms and renewable energy. Acquiring Freedom Mobile would mark its first foray into telecom.

Meanwhile, Mr. Lacavera, chairman of Globalive, which has offered $3.75-billion for Freedom, is accusing Rogers of running a “closed and secretive sales process” that is unlikely to result in Freedom Mobile emerging as a strong fourth player.

In a letter sent last month to Industry Minister François-Philippe Champagne, Competition Commissioner Matthew Boswell, and the Prime Minister’s Office, Mr. Lacavera alleges that Globalive and other potential bidders have been “deliberately excluded” from participating in the sale of Freedom and that Rogers is not dealing with Globalive “in good faith.”

“In fact, we were told numerous times by Rogers that no such process existed, and that neither the fourth carrier business nor its constituent parts were for sale,” Mr. Lacavera wrote in the March 24 letter, which was obtained by The Globe.

He urged the government to be “highly skeptical of any transaction presented to you that is a product of this non-competitive and engineered process, which appears to have as its goal the establishment of an anemic and ineffective owner of the fourth carrier business.”

A spokesperson for Rogers declined to comment.

Mr. Lacavera’s Globalive founded Wind Mobile in 2008 and later sold it to Shaw, which rebranded it Freedom Mobile.

Despite being blocked by Rogers from the continuing sale process for Freedom, Globalive on March 11 submitted an offer that relied heavily on the company’s previous ownership of the business, Mr. Lacavera wrote. Since receiving Globalive’s bid, Rogers and its bankers have refused to negotiate with the company unless it signs a confidentiality agreement that, according to Mr. Lacavera, contains “extraneous restrictions” around financing and communications with regulators surrounding the deal.

“We also surmised (and were told by various parties) that the secretive process was a non-competitive sham,” he said in the letter.

When contacted for comment, Mr. Lacavera said Mr. Champagne “should be very concerned about the backroom deals that have underlined this process and iced out viable competitors.”

He added that the strong first-quarter results that Rogers reported on Wednesday “highlight exactly what happens when there isn’t competition in the market – as soon as Freedom stopped competing … Rogers’ wireless results skyrocketed and the Rogers share price is now at all-time highs.”

Mr. Champagne has previously said that allowing Rogers to acquire all of Freedom’s wireless licences would go against the government’s desire for competition in the sector.

Asked on Friday about Mr. Lacavera’s letter, a spokesperson for Mr. Champagne referred to an earlier statement, which said, “As the regulator responsible for approving the transfer of licensed spectrum, [Mr. Champagne] will review any applications on their merit and what is in the best interest of Canadians.”

A spokesperson for the Competition Bureau said it would be inappropriate to comment on the Freedom sale process as the regulator is required by law to conduct its work confidentially.

“Our objective in reviewing the proposed merger of Rogers and Shaw is to investigate whether it is likely to result in a substantial lessening or prevention of competition in Canada. We remain focused on assessing the impacts of the proposed transaction on mobile wireless, wireline internet and broadcasting services,” Jayme Albert said in a statement.

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