Thanks for responding. I had the opportunity of speaking to a few close friends of mine this weekend who are in the telecommunications and investment fields. General sentiment amongst the group is that some sort of offer might be coming soon. I can't, at this point in time, spend a great deal of time elaborating or justifying sentiments expressed. Commencing Monday, I will be picking up some more shares as will several friends/family members. Why?
Aside from the "friendly" takeover scenario from Bell Mobility, Clearnet is undervalued at these prices. Ironically enough, on December 15th, 1998, Royal Bank-Dominion Securities rated Clearnet a "buy" and put a 12 month price target in the neighborhood of $20 Canadian.
In conjuction and even more importantly, the only true National Cellular company in Canada is Cantel/AT&T. They have their own true national network. Bell Mobility is focused primarily in Ontario/Quebec. They have no national exposure. They are affiliated with the Stentor companies throughout Canada. Now, with the recent announcement of the Telus and BC Tel merger, Bell Mobility needs to seek a partner for that national exposure. Clearnet has focused its efforts on establishing a customer base within the major Metropolitan cities throughout Canada. They have done this with some degree of success and continue to expand their customer base on a national basis. Therefore, if indeed, Bell Mobility acquires Clearnet, they would thus have access to all the "national" customers of Clearnet. This is a perfect fit. Not to mention that Bell Mobility has deep pockets and must compete with Cantel on a national basis.
Therefore, if one clearly looks at the financial and logistical side of things, the so called rumour of Bell Mobility acquiring Clearnet, starts to make perfect sense. Anyhow, even if this merger does not come to fruition (which I personally think it will), the recent stock price is not indicative of where this stock should be. At these levels, it is undervalued. Just some food for thought!
P.S-As for U.S companies coming up to Canada to acquire these Cellular companies-they CANNOT just yet because of the federal government imposed "foreign content" rule. That is why AT&T corporation, does not outright own Cantel. There has been talk recently that the CRTC may be getting ready to loosen or altogether lift these restrictions. But don't hold your breath. The CRTC takes a while to move!
Cheers,
ZEUS
|
