Quebecor could announce sale of Vidéotron Télécom by summer

Quebecor expects to announce before summer who will be buying its Vidéotron Télécom division, with at least one investment analyst predicting there could be more than one new owner. Telus Corp appeared to be out of the running earlier this month when it announced that it would use QuébecTel, which it recently acquired, rather than Vidéotron as its base for expanding operations throughout Quebec. A Quebecor spokesperson says he isn’t worried by the comment, saying "it might be negotiating posturing." He adds that a decision on the fate of Quebec’s second largest fibre network will be known soon."Talks are still going on and we’re hopeful that we’re going to come to a conclusion very soon," Luc Lavoie told Network Letter. Asked if "soon" meant weeks, months or years, he replied, "Most likely weeks." When Quebecor Inc purchased Vidéotron last year, it put the cableco’s telecom division on the market almost immediately (NL, Sept. 25/00). GT Group Telecom Inc expressed an interest in acquiring the company, as did Telus. It was thought that Norigen Communications Inc may also take a gander at the Quebec telecom firm. In a news release, the western telco said it will continue to look at purchases, "but only if such acquisitions enhance shareholder value." It spoke glowingly of its takeover of QuébecTel and its footprint in the province. Quebecor took note of the talk of acquisitions. "It looks like an opening there, but they’re not the only one that we’ve been speaking to," Lavoie explains. There’s no doubt that a Telus-Vidéotron union would greatly benefit the western telco. Vidéotron has a 6000-km fibre network, with a good chunk of that in Montreal. With the takeover of QuébecTel, Telus inherited a 50,000-km grid. It recently announced plans to roll out 30,000 fibre-km each year until 2003, when it expects to cover 80 per cent of the Quebec market. Jonathan Robinson of the National Bank agrees Vidéotron is an attractive acquisition target, but not at any price. Both Telus and Group Telecom have repeatedly said they will not overpay to acquire an installed network base in Quebec. Robinson suspects another type of deal may be in the works that would see Quebecor keep its hand in. "I think as it goes beyond that, it becomes more likely that we’ll see a partnership versus an outright sale as companies like Group Telecom and Telus accelerate their builds in the Quebec market," he says, adding that a deal should be announced by late spring, early summer. While Quebecor may be trying to sell a much-coveted division, some observers caution that it’s still not the best time to be offloading another telecom company into the market. Vidéotron is one of at least three other telcos looking for a new owner, but that reality doesn’t appear to faze Quebecor. Lavoie points out that geography dictates that Vidéotron will be the most popular of the companies up for grabs. "As much as telecommunications are borderless, they’re not totally borderless," he says. "There’s still a geographical aspect to it and there’s still a strong concentration of Vidéotron Télécom in Quebec."

Quebecor could announce sale of Vidéotron Télécom by summer

News | February 26, 2001

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