The Successful Investor Hotline – Friday, November 27, 2015

Article Excerpt

MANITOBA TELECOM SERVICES INC., $30.24, Toronto symbol MBT, has agreed to sell its Allstream division, which sells telephone, Internet and other communication services to businesses across Canada. Allstream supplies 40% of Manitoba Telecom’s revenue. The remaining 60% comes from its MTS division, which has 1.3 million telephone and wireless customers in Manitoba. The buyer is U.S.-based Zayo Group (New York symbol ZAYO), which will pay $465.0 million. Manitoba Telecom will probably use the proceeds to pay down its long-term debt of $677.1 million, which is equal to 28% of its $2.4-billion market cap (or the value of all outstanding shares). Regulators must approve the sale, and national security officials must also agree, as many Canadian government agencies use Allstream’s networks. Manitoba Telecom aims to close the deal in the first quarter of 2016. OUR RECOMMENDATION: Manitoba Telecom is still a hold. Manitoba Telecom recent coverage December 2015 issue November 2015 issue BCE INC., $57.13, Toronto symbol BCE, has agreed to sell up to 15.1 million…