Pension group to acquire Canada telecom giant BCE for $48.5 billion

02 July 2007

Mumbai: A consortium of investors that includes the Ontario Teachers Pension Plan will acquire BCE Inc, Canada''s largest telecommunications group, for C$51.7 billion ($48.5 billion), in what the purchasers said was the largest buyout in Canadian corporate history.

The consortium, led by the pension plan''s investment arm Teachers Private Capital, Providence Equity Partners Inc. and Madison Dearborn Partners, LLC was offering C$42.75 a share, BCE said in a statement.

"The all-cash transaction is valued at C$51.7 billion, including C$16.9 billion of debt, preferred equity and minority interests," BCE said, adding that it expected the deal to close in the first quarter of next year.

The offer was a 40 per cent premium over the "undisturbed share price," or the price before BCE put itself up for sale. BCE shares closed at C$40.34 on the Toronto Stock Exchange on June29.

The BCE board has recommended that the shareholders accept the offer, which includes a break fee of C$800 million payable by BCE in certain circumstances if the deal falls through, and a reverse break-up fee of C$1 billion that would be payable by the buyers.

Teachers Private Capital would own 52 per cent of the company, which meets Canadian rules that telecommunications firms are majority-owned by Canadian firms. Providence would hold 32 per cent, Madison Dearborn 9 per cent and other Canadian investors would hold 7 per cent, BCE said.