The takeover of a public company generally provides a nice instant reward for shareholders of the smaller company in the transaction, but once the offer is on the table, it’s usually as exciting as watching Alan Greenspan think.

But Telus Corp.’s hostile bid for Microcell Telecommunications was a takeover attempt that produced some real drama, a refreshing respite from all those hum-drum, anticlimactic deals.

The action in this deal was far from over once the takeover offer was announced.

With Fido (that’s the brand name of Microcell’s wireless product) ripping at the pantleg of Telus CEO Darren Entwistle like a rabid chihuahua with its low pricing and unlimited minutes calling plan, Telus made a $1.1-billion cash offer or $29 per share for the baby of Canada’s four mobile phone players.

Investors bid the stock up well above the takeover offer and the game was on.

Normally, shareholders of the company being acquired are happy to grab the premium on their shares near the takeover price because it’s dead money and move on. But the Telus offer sparked a flurry of speculation on who might make the next play in this poker game in the cutthroat wireless telecom wars.

On the first day after the news, Microcell shares closed at $31.70, signalling that a bidding war may be in the cards, while Telus shares, not surprisingly, remained flat as many wondered if they’d paid too much.

In the end, Microcell may not even receive a competing bid, but that won’t stop the action as investors speculate on prospective offers from Telus’s main competitors – BCE (owner of Bell Canada), Rogers Communications and Manitoba Telecom.

While the early consensus was that there would not be a rival bid for Microcell, there were still some analysts who were living up to their rose-coloured reputations by throwing gas on the fire with bold and perhaps wild predictions.

John Henderson, a telecom analyst with Scotia Capital, had some investors frothing at the mouth by predicting that another bid will come in and estimating that it could reach $45.

Earlier this year, Henderson created some excitement in speculating that Manitoba Telecom Services would become an income trust worth as much as $65 per share. Oops! That was before MTS stunned the market with its acquisition of Allstream that ended the trust speculation and tanked the stock to its current $45 range.

At the opposite end of the spectrum on the Microcell story sits CIBC World Markets analyst Dvai Ghose, who believes that Telus, by taking out pesky Microcell and its aggressive pricing, took care of business for Telus’s competitors.

Of course, there’s also a wild card in this poker game that may be dealt by the Competition Bureau – the longshot possibility the government body could nix the takeover deal as it assesses its impact on competition in the wireless market.

In that unlikely scenario, those Microcell shareholders who chose to play this poker game by holding their cards could wind up drawing the joker in the deck. Stay tuned.

* CEO OR INVESTMENT ADVISER? In a recent interview on the Money Talks radio program, Bob McEwen, CEO of Goldcorp (G-TSX), went to great lengths to promote gold stocks and emphasized the importance of buying when the sector is out of favour.



HOT STOCK: AIR CANADA
AC-TSX $1.37 Up 36 cents (+35.6%) on 27,969,940 shares (for week ending May 21)
Logic would suggest that not too many folks would want to carry the risk of owning a company in bankruptcy protection whose shares may eventually be worthless. Shares in insolvent Air Canada took flight on one-day volume of 14,162,440 shares on news of a deal with Canadian Auto Workers that could save the airline $1.1 billion. Forget logic.



COLD STOCK: ELECTROVAYA INC.
EFL-TSX $0.95
Down 75 cents (-44.1%) on 1,063,424 shares (for week ending May 21).
Sometimes, it makes sense to sell shares in a hot stock before the company releases earnings, especially if it’s a risky play like Electrovaya that has scored a nine-bagger in less than a year, having run from 27 cents to $2.45. The other option was to sit on the sidelines and root for a miracle while shares in the Mississauga battery technology firm crashed on news of continued quarterly losses.