UPDATE 2-Shaw Communications eyes wireless in C$1.6 bln Wind Mobile bid

(Adds executive interview, source comment, background on
Canada's wireless industry)
By Julie Gordon and Alastair Sharp
VANCOUVER/TORONTO, Dec 16 (Reuters) - Canada's Shaw
Communications Inc SJRb.TO SJR.N said on Wednesday it has
agreed to buy Wind Mobile, the country's fourth-largest wireless
provider, in a deal that gives it a much-needed presence in the
cellular market.
Calgary-based Shaw said the deal valued Wind, and its parent
company Mid-Bowline Group Corp, at C$1.6 billion ($1.16
billion), much higher than the roughly C$300 million a
consortium of investors paid for the young wireless carrier in
2014.
The takeover follows Rogers Communications Inc 's RCIb.TO
C$465-million purchase of smaller rival Mobilicity, which was in
creditor protection, in a series of deals that allowed Wind to
snap up a suite of airwaves at a discount price.
Shaw had bought spectrum that was set aside for new entrants
to the wireless industry in 2008, but never built out that
capacity. Shaw formally sold those airwaves to Rogers as part of
the Mobilicity deal in June, with Rogers then passing on most of
those plus some other airwaves to Wind to secure regulatory
approval.
In taking over Wind, Shaw now not only will regain most of
the spectrum it sold at a profit, but will enter Canada's hotly
contested wireless market with an established cellular presence.
"The way the asset has come together with the various deals,
there was no choice to be made," said Jay Mehr, Shaw's chief
operating officer. "This was absolutely the best way to enter
the Canadian wireless market."
Mehr said the company does not anticipate any "meaningful
regulatory barriers" to the deal, despite a history of the
Canadian government blocking telecommunication deals for
competitive reasons.
One source close to the deal said it should pass regulatory
muster since the buyer is a well-capitalized domestic player
without existing wireless business, keeping regional rivals to
the three national operators in place across the country. Wind
operates in Ontario, Alberta and British Columbia.
"There's a story to be told about how it really stabilizes
the competitive landscape long-term," the source said, adding:
"What concessions might be needed is anyone's guess."
Canada's previous government had opposed Canada's three
largest wireless providers - Telus Corp T.TO , Rogers
Communications and BCE Inc's BCE.TO Bell - buying smaller
players.
Shaw said Wind's existing management team will stay on.
Shaw has struggled against Vancouver-based Telus without a
wireless product to bundle with its television, landline and
Internet offerings.
Wind, backed by Canadian hedge fund West Face Capital Inc
and private equity firm Tennenbaum Capital Partners among other
investors, said earlier this month that it had closed a C$425
million debt facility to help it upgrade its network to the
latest high-speed LTE technology.
Wind has roughly 940,000 wireless subscribers, lagging far
behind the three big Canadian players, each of which has at
least 10 times the subscribers.
($1 = C$1.3783)