BURNABY – Independent wireless retailer Glentel said Wednesday that the terms of a retail agreement that it renewed with Rogers Wireless earlier this year is not enough to block its proposed sale to Bell.
Rogers Communications Partnership filed an application in the Ontario Superior Court of Justice (Commercial List) against Glentel Wednesday, seeking, among other relief, to prohibit the transactions contemplated by the BCE acquisition plan of arrangement announced last month. According to the injunction, Rogers’ retailer agreement with Glentel, renewed in July, requires Rogers' approval prior to a change of control of Glentel. Rogers said that it has, on two occasions this month, declined to provide that consent.
“We value our relationship with Glentel and they continue to offer our products in their stores”, Rogers spokesperson Patricia Trott told Cartt.ca in an emailed statement. “This court case is 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 issued a press release describing Rogers' application as “meritless”, and said that it is able to complete the transaction according to its terms.
"For over 25 years, Glentel has distributed Rogers mobile products through our Canadian retail stores and we hope to continue to do so”, said Glentel president and CEO Tom Skidmore, in the release. “The BCE acquisition does not affect Glentel's agreement with Rogers which will continue to remain in force after the acquisition completes. 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, which operates in Canada, the United States, Australia and the Philippines. Rogers' claim is without merit and we will certainly defend against it. 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."
Bell said on November 28 that it planned to buy the independent mobile retailer for $670 million. The board of directors of Glentel unanimously approved the transaction and recommended that shareholders vote in favour of it. Glentel has scheduled a shareholders meeting to obtain approval of the deal on January 12, 2015. The Skidmore family, which owns approximately 37% of the common equity of Glentel, also supports the transaction.
Headquartered in Burnaby, BC, Glentel operates 494 retail locations across Canada; owns, operates, and franchises approximately 735 retail locations in the United States; plus has 147 points of sale in Australia and the Philippines. In Canada, Glentel offers wireless products and services from Bell Mobility, Chatr, Fido, Rogers Wireless, SaskTel and Virgin Mobile.
