Rogers Said to Have Interest in Acquiring Allstream from MTS

MTS Allstream is still up for sale, and one of the potential buyers is Rogers. The carrier, on the other hand, is refraining from showing any public interest in Allstream, reports the Globe and Mail.

Actually, as Rogers chief financial officer Tony Staffieri pointed out jokingly, it’s the second-most popular subject he gets asked by Allstream. There is a good reason why: the merger makes strategic sense for the carrier, as Allstream’s 30,000-kilometre fibre network would strengthen Rogers’ position in a competition with Telus and BCE, according to Barclays Capital’s Philip Huang.

By the way, the two parties already do business worth about half of Alltstream’s estimate worth, which is between $300 million and $400 million.

MTS’ enterprise communications branch has been up for sale since 2013, when it reached an agreement with Egyptian firm Accelero Capital for $520 million. The government, however, rejected the deal, citing national security concerns.

“We don’t want to miss an opportunity if there is an opportunity there. But I will say that we’ve looked at it in the past and decided to pass on it,” the CFO said of Allstream. “So, if there’s enough accretive value at the right price, it could be something we’re interested in, but that hasn’t been the case in the past.”

Since then, MTS has learned a lot, and now it seems to have superior insight on the government approval process. As a result, it has approached only potential buyers that meet government requirements.

Earlier in 2009, Rogers and Allstream entered into a partnership to build a high-speed wireless network in Manitoba. That allowed both Rogers and MTS to boost their coverage with expanded 3.5 HSPA wireless network services in the area.