MONTREAL and THUNDER BAY – City-owned telco Thunder Bay Telephone and Bell Nordiq Income Fund have entered into a 45 day exclusivity agreement in order to look at a possible partnership.
Under the terms of the agreement, TBayTel has agreed not to solicit, initiate or encourage proposals from third parties or otherwise provide information to such parties. TBayTel has also agreed to allow Bell Nordiq to carry out a due diligence review of its business.
TBayTel sent out a request for proposals (RFP) looking for potential partners earlier this year. The telco wants to expand its service offering (including into television) but doesn’t have the size to do so economically.
It apparently is not looking for a buyer at this point, but a partner. TBayTel has had preliminary discussions with both Telus and MTS, an executive from the Thunder Bay telco told www.cartt.ca earlier this year.
“Part of the problem is that whether it’s IPTV or whether it’s mobility, a market our size, it’s pretty tough to get decent business cases,” he said.
Bell Nordiq Group Inc. holds a 63.4% interest in and is the general partner of both Télébec and NorthernTel, Limited Partnership, the regional telcos in Northern Quebec and Ontario, respectively.
“The potential partnership is in line with our growth strategy of concentrating on profitable growth and increasing our presence as a major regional telecom provider," said Roch L. Dubé, president and CEO, Bell Nordiq Group, in a statement. "The market and demographic characteristics of TBayTel’s properties are aligned with our business model, which has been successfully adapted to meet the distinct needs and challenges of regional markets."
“There is no assurance that a transaction will result from the exploratory discussions and due diligence process. However, should the negotiations progress further, Bell Nordiq Group’s board of directors, as well as the city of Thunder Bay, will be asked to review the transaction’s contemplated terms and conditions. Furthermore, the creation of a partnership would be subject to various approvals, including agreement by both parties as well as other standard regulatory approvals,” concludes the press release.
