Manitoba Telecom (TSE:MBT) has struck a deal to unload its business communications unit, Allstream, to a company backed by an Egyptian billionaire who's made a previous foray into the Canadian telecom landscape.
Accelero Capital Holdings will pay Manitoba Telecom $520 million for the Toronto-based Allstream, which staffs more than 2,000 people.
As part of the agreement, Manitoba Telecom will meet all of Allstream's outstanding pension obligations.
Earlier this month, when Manitoba Telecom reported quarterly results, investors were left scratching their heads after getting no indication of what management planned to do with Allstream as part of an ongoing strategic review. A CIBC analyst note had called Allstream an "anchor to valuation."
Friday morning shares were rising 5.3 per cent as of 10:13 am ET.
Accelero, comprised of former Egyptian telecom executives who have specialized in turn-around scenarios, is an investment company focused on telecommunications, digital media and technology.
Naguib Sawiris, Accelero's non-executive chairman, is the second-richest man in Egypt, according to Forbes. As the executive chairman of Orascom Telecom Holding, he launched Wind Mobile through the firm's Canadian subsidiary Globalive in 2009.
Russian mobile telephone company VimpelCom would later acquire WIND Telecom, Orascom's parent company. According to a Morningstar analyst note in April, rumours suggest VimpelCom is prepared to sell Wind Mobile. Morningstar believes under the most likely circumstances, Wind will combine with one of the other new mobile market entrants, and eventually be taken out by one of Canada's incumbents.
Sawiris has also dipped into the Canadian mining sector. He is the founder of Weather Investments II, which bought gold producer La Mancha Resources last July.