UPDATE 2-Manitoba Telecom to sell fiber-optic network to Zayo Group
(Adds CEO interview, share price move, details, byline, dateline)
By Alastair Sharp
TORONTO Nov 23 (Reuters) - Canadian telecom company Manitoba Telecom Services Inc said on Monday it had agreed to sell its fiber-optic network Allstream, sending its shares up 5 percent as investors cheered the exit of a disappointing asset.
The sale of the cash-flow negative national network - to U.S.-based Zayo Group Holdings Inc for C$465 million ($347.4 million) in cash - allows Manitoba Telecom to focus on a turnaround plan for its business selling phone, Internet and television connections in the central province of Manitoba.
Allstream "was a chronic underperformer in terms of the expectations of the marketplace," Manitoba Telecom CEO Jay Forbes said in a telephone interview.
"Expect an even more aggressive player in this Manitoba marketplace," he said.
Manitoba Telecom's shares last traded up 5.2 percent at C$30.07 on the Toronto Stock Exchange, their highest level since September 2014, while Zayo's Nasdaq-listed shares gained 2.3 percent to $23.90.
Zayo said Allstream's 9,000-plus kilometers (5,600 miles) of connections in Canada's five biggest cities and around 20,000 kms (12,400 miles) of long-haul fiber fit with the company's 87,000 miles (140,000 km) network in the United States and Europe.
The deal is expected to close early next year, with Manitoba Telecom taking extra effort to consult with competition and national security bodies after an earlier deal failed. Continued...