Analysts have speculated that shares of the Big 3 telecommunication giants catering Canadian wireless market, i.e. BCE Inc., Rogers Communications Inc. and Telus Corp., will shoot up steeply in light of the announcement made by Verizon Communications Inc. that it has decided not to enter Canada. An analyst at BCMI Research in Barrie, Chris Damas, stated that “all will open up tomorrow morning in a big relief rally,” and “I estimate you’ll see at least a $2 gain in these shares.”
The announcement made by Verizon on Monday, declaring that the company has decided not to enter Canadian market, was made a short while after it agreed to buy Vodafone Group Plc’s 45% stake in Verizon Wireless. The deal allowed Verizon to gain full control of the most profitable U.S. mobile-phone operator for $130 billion in the biggest acquisition in more than a decade.
In a telephonic interview on Monday, chief executive of New York-based Verizon, Lowell McAdam stated that “Verizon is not going to Canada,” and “it has nothing to do with the Vodafone deal, it has to do with our view of what kind of value we could get for shareholders. If we thought it had great value creation we would do it.” Mr. Damas also mentioned in a note on Wednesday that “due to the uncertain rate environment, these yield stocks might not get back to previous highs over the next few months, but they should come close.”
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