Dow Jones Newswires
Clearnet Commun Rise Seen Tied To Bell
Atlantic/Airtouch
By LORI MCLEOD and BEN DUMMETT
Dow Jones Newswires
TORONTO -- The increase in Clearnet Communications Inc.'s (CLNTF)
stock Tuesday is tied to the merger talks involving Bell Atlantic Corp. (BEL)
and Airtouch Communications Inc. (ATI), according to two analysts.
In a report Tuesday, Dvai Ghose, analyst with HSBC Securities, said the
rally in late December in North American wireless stocks was due to the Bell
Atlantic/Airtouch merger talks. He noted that Clearnet wasn't part of this
rally. "In our opinion, this is unjustifiable as Clearnet holds the most valuable
strategic position in the Canadian wireless sector and represents the most
attractive takeover candidate."
Another analyst, who asked not to be identified, said Clearnet is the "most
talked about" candidate for consolidation because its technology is
compatible with that of Bell Canada, which is Canada's largest
telecommunications company.
In Tuesday trading in Toronto, Clearnet's A stock is up 0.90, or 6.7%, to
14.40, on about 223,000 shares.
According to a report by analyst Dvai Ghose of HSBC Securities, Clearnet
Communications Inc.'s (CLNTF) technology is also compatible with that of BC
Telecom Inc. (T.BCT) and Telus Corp. (T.T).
The report says management of the soon-to-be-merged BC Telecom and
Telus have made it clear they are interested in owning a wireless company.
An analyst, who asked not to be identified, said Clearnet is "exciting" due to
its fundamentals and strategic position. He added the entire wireless sector
is being "fueled" by the view that fourth-quarter results will be stronger than
expected.
Clearnet competitor Microcell Telecommunications Inc.'s B shares are up
6.9% at 10.15 in Toronto Tuesday.
The wireless sector is also experiencing renewed interest from institutional
investors after "underperforming" for the last three years, the analyst added.
Dvai Ghose of HSBC Securities said he's heard a rumor that Bell Canada, a
unit of BCE Inc. (BCE), is interested in acquiring Clearnet Communications
Inc. (CLNTF). However, "I don't (give) any immediate credence" to these
rumors, the analyst said.
A spokesman for Clearnet said there's "no truth to the rumors." No one was
immediately available at BCE for comment.
Ghose pointed out that current regulations would prevent Bell Canada from
using Clearnet's wireless spectrum in Ontario and Quebec because Bell
Canada's spectrum together with Clearnet's would exceed the allowable
limit.
At the same time, Ghose didn't rule out the possibility of Bell Canada
showing interest in acquiring Clearnet sometime in the future if the spectrum
cap in Canada is lifted. By acquiring Clearnet, Bell Canada would get a
national wireless network based on technology compatible with its own,
Ghose noted.
-By Lori McLeod; 416-943-7800 |
