Globalive Takes $3.7 Billion Offer for Freedom Mobile Directly to Shaw, Sidesteps Rogers: Report

According to The Globe and Mail, Freedom Mobile founder Anthony Lacavera has taken his investment firm Globalive Capital’s $3.75 billion offer to buy the wireless unit back straight to Shaw Communications Inc. after not being taken seriously by Rogers.

Freedom Mobile was established in 2008 by Lacavera as Wind Mobile. He built the wireless upstart into Canada’s fourth-largest carrier, before selling it off to Shaw, who renamed it Freedom Mobile, for $1.6 billion in 2016.

Rogers and Shaw are now looking to sell Freedom in a move to gain regulatory approval for their proposed $26 billion merger from the Competition Bureau and the Ministry of Innovation, Science and Economic Development (ISED) Canada.

Both authorities are yet to sign off on the deal, and the Bureau has officially asked the Competition Tribunal to block it altogether.

Rogers has been in talks with several suitors for Freedom Mobile over the past few months, including rural internet service provider Xplornet Communications Inc., backed by U.S.-based investment firm Stonepeak Partners LP, and the Aquilini family, which owns the Vancouver Canucks.

The two telecom giants even turned to Québecor Media Inc. for a potential deal last month, and have reportedly been in negotiations with the Vidéotron parent since.

Lacavera has expressed interest in buying back Freedom but says he has been stonewalled from negotiations by Rogers. Last month, he called Rogers out for trying to pawn off Freedom in a sale process he said amounts to a “non-competitive sham.”

“Rogers has continued to decline to engage with us despite the strength of the Globalive proposal toward ensuring a more competitive wireless market emerges out of the Shaw acquisition, so we decided to make our offer to Shaw directly,” Lacavera said in a statement.

He added that Globalive “has been standing by to sign the Rogers [confidentiality agreement] for over a month now, without any changes, and Rogers has declined to sign it with us.”

Globalive has also reached a network and spectrum sharing agreement with Telus that would allow Freedom to expand nationally, should Lacavera succeed in acquiring it from Rogers-Shaw.

It doesn’t look like Lacavera has had better luck bringing Shaw to the negotiation table, though. According to sources familiar with the matter, Shaw has not responded to Globalive’s unsolicited offer to buy all of Freedom Mobile’s spectrum licences, network infrastructure, customer contracts, and stores.

A Shaw spokesperson told The Globe and Mail that the company’s agreement with Rogers bars it from responding to such an offer.

“Under the terms of the Arrangement Agreement, Shaw would not be able to enter into or participate in any discussions or negotiations with respect to any proposal of this nature,” Chethan Lakshman said in an email.

The Competition Bureau has said that none of the remedies presented by Rogers-Shaw so far have satisfied its vision for a fourth wireless carrier to preserve competition.

The antitrust watchdog on Monday announced that both Rogers and Shaw have agreed to a preliminary injunction that prevents them from closing their deal until a decision has been made by the Competition Tribunal.