The Successful Investor Hotline – Friday, November 22, 2013

Article Excerpt

MANITOBA TELECOM SERVICES INC., $29.00, Toronto symbol MBT, recently agreed to sell its Allstream subsidiary to a private company controlled by an Egyptian billionaire. Allstream provides integrated telephone, Internet and other communication services to over 50,000 businesses across Canada, as well as government agencies. Manitoba Telecom planned to contribute $130 million of the $405 million it would have received from the sale to its underfunded employees’ pension fund. However, Ottawa blocked the deal on national security grounds. The company now plans to raise cash for the pension fund by selling up to 8.9 million new common shares at $28.10 each. That will raise the total number outstanding by about 13%. The share sale should close on December 6, 2013. This move will generate proceeds of $238 million, after underwriting fees, which Manitoba Telecom will contribute to the pension fund. As a result, it won’t need to make further payments until at least 2016. Manitoba Telecom is still a hold. Please make sure you are logged…