Telus to take control of QuebecTel

Telus, a B.C. and Alberta-based telecom company, has taken a major step in becoming a national player by announcing plans to buy a controlling interest in the QuebecTel Group, the second-biggest telecom company in Quebec.

The price for a 70 per cent interest in QuebecTel: $585 million. Telus will buy 49 per cent of the stock from QuebecTel's minority shareholders for $23 a share. The other 21 per cent will come from a subsidiary of GTE, which is the biggest shareholder in Telus.

Thirty per cent of QuebecTel will remain owned by U.S.-based GTE. Friday's deal would effectively convert QuebecTel from a foreign-controlled company into a Canadian one.

Hugues St-Pierre, president and CEO of QuebecTel, said "Becoming part of a Canadian-owned undertaking opens up fantastic growth opportunities for our customers, employees and community. Now, QuebecTel is ready to serve all of Quebec."

The Telus deal brings more competition to the national telecom market, where Rogers Communications, and BCE and its Bell Canada are already major players.

Telus says its acquisition of QuebecTel will accelerate its entry into Quebec by two years. QuebecTel "provides a strong management team with deep market knowledge together with an experienced employee base. It's a truly remarkable, strategic fit," Telus CEO Brian Canfield said in a release.

QuebecTel's board has approved the plan and has recommended its minority shareholders do so as well. QuebecTel shares were up $1.70 at $22.35. Telus shares were unchanged at $43.60.