Rogers attempts to block Glentel sale to BCE, says deal requires its approval

TORONTO – Rogers Communications (TSX:RCI.B) has filed an application to block its rival, BCE Inc., from buying wireless phone retailer Glentel Inc. in a previously announced deal valued at $670 million in stock, cash and debt.

The country’s largest wireless carrier filed the proposed injunction Wednesday with the Ontario Superior Court of Justice.

According to court documents, Rogers claims that Glentel (TSX:GLN) has not sought its approval for the BCE (TSX:BCE) acquisition which was required in their agreement.

“We value our relationship with Glentel and they continue to offer our products in their stores,” said Rogers spokeswoman Patricia Trott in an email.

“This court case is simply about protecting our rights — we’re asking the court to ensure they honour our agreement, which says they required our prior consent to a change in ownership.”

Glentel sells wireless products and services from a variety of carriers including Rogers Wireless, Bell Mobility, Chatr, Fido, SaskTel and Virgin Mobile.

It said the proposed BCE sale does not affect its distribution contract with Rogers, which it has held for 25 years.

“Rogers’ claim is without merit and we will certainly defend against it,” Glentel said in a statement.

“Approval of the acquisition is up to Glentel’s shareholders, not one of our many suppliers, and we look forward to closing the acquisition in early 2015.”

The company added that if Rogers does not approve of this transaction, it can end its agreement with Glentel.

“Rogers has the right to remove their products from our Canadian stores if they choose or to terminate its agreement with us, but has no right under its agreement to block the acquisition of Glentel,” it said.

The deal, which was announced last month, was approved by Glentel’s board of directors. The Skidmore family, which holds a 37 per cent stake in Glentel, has also signed agreements with Bell supporting the sale. A special meeting of shareholders has been scheduled for Jan. 12, 2015.

Burnaby, B.C.-based Glentel has nearly 500 retail locations across Canada under the banners WirelessWave, Wave Sans Fil, TBooth Wireless and Wireless Etc. It also operates 735 locations in the U.S. and 147 in Australia and the Philippines.