One of Canada’s largest private equity firm is suing the former owners of Wind Mobile for allegedly breaching an exclusivity agreement and conspiring to stop the company from buying the carrier two years ago.
In a claim filed with the Ontario Superior Court of Justice this week and obtained by the Financial Post, Catalyst Capital Group alleges that Globalive, the investment firm started by Wind Mobile founder Anthony Lacavera, and several other investors used confidential information to sabotage its deal to purchase Wind Mobile from then owner VimpelCom.
Catalyst is seeking $750 million in damages, the amount it estimates it would have made had it been able to complete the acquisition of Wind Mobile without interference.
According to the claim, negotiations between Catalyst and VimpelCom had gotten to the point where the latter had signed an agreement with Catalyst, stating it would not solicit or consider other offers from July 23rd to August 19th, 2014. A deal had been finalized in principal on August 3rd, says the claim.
Catalyst also alleges Lacavera sought to derail the deal because he knew the firm would force him to step down as CEO of Wind Mobile and that it would strip him of his stake in the carrier.
Catalyst Capital is the same private equity firm that bought a minor stake in Corus Media prior to the company’s acquisition of Shaw Media. When Corus Media’s shareholders met in Toronto to discuss the then proposed deal, Catalyst argued the deal was only to the benefit of the Shaw family. The firm successfully managed to create dissent among Corus’s minority shareholders, but ultimately failed to derail the deal.
In 2013, the firm bought an approximately 30 percent debt stake in Mobilicity, primarily because it wanted to facilitate a merger between the carrier and Wind Mobile.
We’ve reached out to both Catalyst Capital and Lacavera to get their respective sides of the story. We’ll update this story if and when we hear back from the two parties.