Shaw’s deal for Wind leaves investors cold, but CEO says he’s in it for the long haul – FINANCIAL NEWS-ecozik.com
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Shaw’s deal for Wind leaves investors cold, but CEO says he’s in it for the long haul

The stocks of Canada's big three telecom companies are feeling the squeeze today as Shaw announced it is buying Wind Mobile.

Brad Shaw expected the marketplace to be pleased about his company’s decision to go in the lucrative wireless business by acquiring Wind Mobile Corp. in a transaction worth $1.6 billion.

FP1218_Shaw_C_MFInstead, investors dashed for the exit Thursday.

Class B shares of closely held Shaw Communications Inc. tumbled roughly eight per cent to $24.83 in Toronto, falling as much as nine per cent at one point within the day.

The acquisition triggered a broader sell off in the sector, with Telus’s shares falling 6.8 per cent, BCE Inc.’s declining 2.5 percent and class B shares of Rogers Communications Inc. sinking 5.5 percent. The benchmark S&P/TSX Composite Index was also within the negative, dropping 1.1 per cent.

Many of the Bay Street analysts who cover Shaw were singing a much more pleasant tune.

“We view this transaction like a strategic game changer for Shaw,” wrote analysts at RBC Capital Markets.

Macquarie analysts had valued Wind in the $1.9-billion range and saw this deal to be a positive for Shaw in long term. “We like the Wind asset,” they said.

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