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Fongo's Wind Mobile bid claim met with skepticism

The Wind Mobile store at the Holt Renfrew centre in Toronto is seen on December 15, 2010.

JENNIFER ROBERTS/The Globe and Mail

Mobile telecom company Fongo Inc. says it's making a bid to buy Wind Mobile's Canadian operations.

The Waterloo, Ont., company didn't say how much it will offer for Toronto-based Wind, which launched in 2009.

Fongo says it plans to retain the majority of Wind Mobile's employees but will rethink many aspects of the business.

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The company also says that since February 2012 more than 250,000 Canadians have signed up for Fongo's free mobile phone service through a mobile app.

Wind Mobile, part of a wave of new wireless companies offering more cellphone competition in Canada, was launched by founder Tony Lacavera with financial backing from Egyptian telecom player Naguib Sawiris.

They are expected to make a bid to buy back the company from its current Dutch owner, VimpelCom, which has put Wind Mobile up for sale.

However, Dvai Ghose, an analyst with Canaccord Genuity, questioned the seriousness of Fongo's bid in a note to investors on Wednesday. Having never heard of the company before, he was left relying on the private company's description of itself from its website.

"Does Fongo really have the capital and expertise to acquire and build Wind Mobile?" Mr. Ghose asked, noting that the company was private and he had no access to its financial data but that aspects of the bid did not make sense. "While we are not taking the Fongo (news) release overly seriously at this time, the question remains is Wind for sale and are there real buyers?"

It was also not apparent that Wind executives were taking the Fongo bid seriously. Simon Lockie, Wind's chief regulatory officer, tweeted: "I hereby publicly offer to buy Fongo for $1 and half my sandwich. Hopefully the story gets picked up before I get too hungry to deliver."

With a file from The Globe and Mail staff

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