Latest news with #TelusInternational
Globe and Mail
5 hours ago
- Business
- Globe and Mail
Telus fails to deliver on Entwistle's IPO-based growth strategy
Would anyone buy another initial public offering promoted by long-serving Telus Corp. T-T chief executive officer Darren Entwistle? If the answer to that question is no, Mr. Entwistle's growth strategy at Telus is dead in the water. And it's hard to imagine investors stepping up for future Telus spinoffs after Tuesday's announcement that the parent company wants to put troubled offspring Telus International (Cda) Inc. TIXT-T out of its public market misery. Telus is offering to buy out shareholders in its subsidiary at a steep 86-per-cent discount to the price of its IPO, done with considerable fanfare just four years ago. Mr. Entwistle, a dominating personality who has been at the helm for 25 years, built Telus beyond its legacy phone networks by investing billions in subsidiaries focused on digital customer services, health care and agriculture. The idea was to incubate these businesses inside the Vancouver-based telecom, then launch them as public companies, with Telus shareholders reaping rewards from the value created on Mr. Entwistle's watch. Telus International – rebranded in 2024 as Telus Digital Experience – was meant to be the first in a series of spinoffs. Telus Health is up next, with an IPO anticipated as early as 2026. The incubator concept initially looked like a winner, as Telus Digital went public in 2021 at US$25 per share in what the parent company proudly heralded as the largest tech IPO in Toronto Stock Exchange history. At the time, Telus Digital's US$8.5-billion market capitalization rivalled that of the parent telecom. Execution failed to match ambition. Telus Digital proved a case study in value destruction. The company's challenges include a core business that runs call centres for clients such as retailers, hotels and banks. Artificial intelligence-based systems now dominate this space. Telus Digital proved slow to pivot, and customers moved on. On Wednesday, Telus reversed field by making a 'non-binding indication of interest,' or IOI, to acquire the 42.6 per cent of Telus Digital shares it doesn't own for US$3.40 each. Telus Digital shares promptly jumped 24 per cent Thursday to close at US$3.67 on expectations the parent company will be forced to goose its bid to get a deal done. Mr. Entwistle put a brave face on Telus Digital's face plant. In announcing the IOI, he said reintegrating the unit's tech expertise will benefit all of Telus's businesses, including telecom. While that may be true, buying back the subsidiary is an admission of failure. Telus set lofty goals for its diversification strategy, then failed to hit them. Telus proposes buying back Telus Digital for more than US$400-million Telus Health prepares to stand alone after years of acquisitions 'Today's rather dismal proposal has no 'congratulatory' terms that were to be found at the time of the IPO,' said analyst Tyler Tebbs at Tebbs Capital in a report. He said Telus is only offering to repurchase its subsidiary after failing to find a buyer for the business. Memories are long in financial circles. Mr. Tebbs compared the Telus offer to the ill-fated M&A at Time Warner Inc. in the recent past. He said the buyback 'is yet another example of a telecom/media company reversing a transaction done in much better times at the expense of shareholders.' In public markets, you're only as good as your last deal. Fund mangers got caught up in a craze for all things digital during the early days of the pandemic. That dynamic set the stage for a successful IPO at Telus Digital. The second time around, institutional and retail investors will be far more skeptical about buying when Mr. Entwistle is selling. To get an IPO done at Telus Health or Telus Agriculture, the parent company will likely be forced to accept a steep discount to the underlying value of the business, which defeats the purpose of the incubator concept. Yet without the ability to exit investments, Mr. Entwistle is running a debt-heavy conglomerate, anchored by a well-run but slow-growth telecom network that qualifies as critical infrastructure for the Canadian economy. Outside of founder-run businesses, it's hard to name a domestic public company more identified with its CEO than Telus. At Telus Digital, Mr. Entwistle's IPO-based growth strategy failed to deliver. The Telus board, chaired by former deputy prime minister John Manley, needs to ask hard questions about what comes next and who is best positioned to lead a business that has become the vision of a single executive.
Yahoo
7 hours ago
- Business
- Yahoo
Telus International shares surge following buyout proposal from parent Telus Corp
-- Shares of Telus (NYSE:TU) International (TSX:TIXT) surged more than 24% on Thursday after receiving an unsolicited acquisition proposal from majority owner Telus Corp (TSX:T). The Canadian telecom giant offered $3.40 per share in cash for the remaining equity it does not already own in the digital services provider. Telus Corp currently holds 57.4% of Telus International's total outstanding shares and close to 87% of all voting rights. Following the announcement, Telus Corp's own shares edged up 0.7% in trading. The acquisition is subject to several conditions, including due diligence, negotiation of definitive agreements, and regulatory clearances in Canada and the U.S. Telus International emphasized that no binding agreement has been signed and that there is no guarantee the transaction will be finalized. A special committee of independent directors will be formed to review and assess the proposal, according to the company. "Given the structural challenges and uncertain demand backdrop, along with the preexisting partnership and ownership of Telus Corp, we expect the proposed acquisition to close without many hurdles," said Maggie Nolan, an analyst at William Blair. She maintained a Market Perform rating on the stock, adding, "The macroeconomic backdrop has pressured growth prospects in the near term, and we expect that Telus Digital's margins will remain under pressure due to challenges with the recent cost optimization initiatives, pricing pressure from competitive forces, and a mix shift into more AI-related solutions." Management at Telus Corp. sees the transaction as a strategic maneuver that could align digital strategy and capital allocation across the broader Telus ecosystem. The company aims to integrate Telus Digital's capabilities to strengthen initiatives across its telecom, healthcare, and agricultural units. While the offer reaffirms Telus Corp's commitment to accelerating digital innovation and operational synergy, governance processes related to shareholder fairness are expected to play a pivotal role. Telus International reiterated that all strategic alternatives remain under consideration. Related articles Telus International shares surge following buyout proposal from parent Telus Corp GameStop bets on trading cards, stock continues slide FTSE 100 today: shares rise as U.K. GDP falls; Pound nears $1.36; Tesco gains Sign in to access your portfolio
CTV News
12 hours ago
- Business
- CTV News
Telus Corp. proposes to buy back full ownership of Telus Digital
Telus Corp. headquarters is seen in downtown Vancouver. THE CANADIAN PRESS/Darryl Dyck VANCOUVER — Telus Corp. has proposed to buy back full ownership of Telus International (Cda) Inc. in a proposal that values the company it spun off in 2021 at about US$940 million. Under the non-binding indication of interest, Telus says it will pay $3.40 per share in cash or Telus shares or a combination of both for the shares in the company which operates as Telus Digital that it does not already hold. Telus International shares, which closed at $2.96 on the New York Stock Exchange (NYSE) on Wednesday, were up 71 cents US at US$3.67 in trading Thursday. The shares were up 95 cents at C$5.00 in trading on the Toronto Stock Exchange (TSX). The company, which provides IT services and customer service to global clients, went public in 2021 with an initial public offering of $25 per share. Telus already owns 57.4 per cent of the company's outstanding shares including 92.5 per cent of the multiple voting shares and 6.1 per cent of the subordinate voting shares, making its offer worth about $400 million. Telus chief executive Darren Entwistle says the proposed deal will yield meaningful benefits for Telus Digital and Telus customers and investors. This report by The Canadian Press was first published June 12, 2025.
Washington Post
09-05-2025
- Business
- Washington Post
Telus International: Q1 Earnings Snapshot
VANCOUVER, British Columbia — VANCOUVER, British Columbia — Telus International Inc. (TIXT) on Friday reported a loss of $25 million in its first quarter. On a per-share basis, the Vancouver, British Columbia-based company said it had a loss of 9 cents. Earnings, adjusted for one-time gains and costs, came to 6 cents per share.
Economic Times
05-05-2025
- Business
- Economic Times
Meta content moderation contractor cuts over 2,000 jobs in Spain: union
Canadian tech firm Telus International, tasked by Meta to moderate content on its social media networks Facebook and Instagram, will slash over 2,000 jobs in Barcelona, a Spanish union said Monday. During a meeting on Monday morning the company, which operates locally as Barcelona Digital Services, said it had terminated the contracts "of all workers who were performing content moderation tasks" for Meta, affecting 2,059 people, local union CCOO said in a statement.
