Telus is in talks to sell nearly half of its cellphone tower business for about $1.2 billion, as the telecom giant works to cut its debt.
Back in March, it was rumoured that Telus wanted to target U.S. buyers to avoid pushback from the federal government. But now it looks like that has changed.
Telus is reportedly in second-round discussions with three major Canadian investment firms, including pension funds Ontario Municipal Employees’ Retirement System (OMERS), Brookfield, and BCI (British Columbia Investment Management Corporation ), reports the Globe and Mail.
The deal would see Telus spin off 49% of its 3,000 wireless towers into a new company called Terrion, says one source speaking to the Globe. According to insiders, Telus hopes to finalize the deal by the end of the year, with plans to use all proceeds to pay off debt. The new company would be led by former Telus exec Eros Spadotto.
This isn’t just a Telus move—Rogers and Bell have also been selling off parts of their networks or cutting costs as the Canadian telecom industry hits a plateau. Rogers recently sold part of its backhaul business for $7 billion. Bell has offloaded assets and even reduced its dividend to bring in cash.
Telus has around $25 billion in long-term debt and wants to lower its debt-to-earnings ratio significantly by 2027. Alongside the tower sale, it’s also shedding older copper infrastructure, real estate, and recently raised US$1.5 billion in bonds to stay afloat.
Foreign companies were initially interested in Telus’s tower network, but they backed out after learning they wouldn’t get full control, say sources. U.S.-based SBA Communications showed early interest in Telus’s tower network but walked away after learning it wouldn’t get control of the division. Other American telecom giants, including American Tower and Crown Castle, also backed out for similar reasons.
Let’s wait and see which one of these investment firms will end up making the final purchase. What are your bets?
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For no other reason than to stir some shit up on this sunny Friday in the city, I'll say BAM…
Brookfield moved its Head Office from Toronto to New York in October 2024, would they still qualify as a Canadian company?