|
Tuesday 08 July 2008 BCE Inc. (BCE : TSX : $39.41)
Signed credit agreement provides near certainty of deal closing
Canaccord Capital maintains "buy", 12-month target price is $42.75
Credit Suisse First Boston maintains "neutral", 12-month target price is $42.75
Desjardins Securities maintains "hold", 12-month target price is $42.75
GMP Securities maintains "tender" 12-month target price is $42.75
Monday 07 July 2008 BCE (BCE : TSX : $39.64)
Net Change: 4.49, % Change: 12.77%, Volume: 28,932,333 "Ring my bell" - Anita Ward. Despite numerous head fakes and cheap shots, the fight between BCE, the banks and bitter bondholders appears to be all but over. On Friday, BCE and its buyers announced a final agreement to close the deal at the original price of $42.75, "on or before December 11".
Yes, it turns out the original secured agreement was indeed secured, as the banks look to have thrown in the towel (though they did push out the closing date). The common share dividend will be cut, though preferred shareholders will continue to receive one. In addition, the break-fee was increased to $1.2 billion from $1.0 billion (more of a gesture than anything else). Some long-term BCE shareholders will finally be rewarded
having grinned and bared through a stock price that they knew should be much higher. BCE also announced it will replace Michael Sabia effective next week with George Cope, BCE's COO and President since October 2005.
Sunday Jul 6, 2008 Sabia can take a bow for BCE pact
Sunday Jul 6, 2008 BCE buyout: now comes the hard part
Saturday Jul 5, 2008 BCE closes in on done deal
Investors in BCE Inc. breathed a sigh of relief yesterday as the big remaining question hanging over the bid to take the company private was resolved. BCE's buyers, the Ontario Teachers Pension Fund and several other private equity investors, agreed to stick to the original offer of $42.75 a share. "Essential milestones" were reached, the buyers said.
BCE shares shoot up
Shares of BCE Inc. soared 13 per cent on the Toronto Stock Exchange yesterday morning after the company announced its $35..Shares of BCE Inc. soared 13 per cent on the Toronto Stock Exchange yesterday morning after the company announced its $35-billion takeover deal will go forward at the agreed on price of $42.75 per common share.
Since the deal was announced in June 2007, BCE shares have traded well below the proposed purchase price as investors fretted the deal would be repriced or possibly scrapped, particularly after the credit crunch hit financial markets.
The company's shares on the New York Stock Exchange were unchanged at $34.75 U.S. as U.S. markets closed for the July 4 holiday. Trading volume on the Toronto Stock Exchange had almost doubled the six-month average by mid-morning.Friday Jul 4, 2008 BCE reaches $35 billion agreement
Deal expected to close on Dec 11
Wednesday 02 July 2008 Internet traffic jam angers Bell critics
There was a fresh upsurge of anger toward Bell Canada last week when the telco released details of the congestion on its.
BCE withholds dividend
For the second time in less than a month, BCE Inc. has announced it is deferring payment of its second-quarter shareholder...
Tuesday 24 June 2008 TORONTO: BCE STOCK STILL SHORT OF TAKEOVER PRICE
Stock of BCE Inc. rose 5.7 per cent in trading on Monday closing at $36.58 on the first trading day since the Supreme Court of Canada reversed on Friday a lower court decision in May that invalidated the proposed takeover. The closing stock price remained well short of the $42.04 which is offered for its takeover. The offer was made a year ago by a consortium led by Ontario Teachers' Pension Plan. The banks say they're still committed to finance the $52-billion takeover but continue to bargain over the terms.
BCE Inc. (BCE : TSX : $37.42 | NYSE : US$34.10)
Supreme court overturns ruling that favoured bondholders
Canaccord Capital maintains "buy", 12-month target price is $42.75
Credit Suisse First Boston maintains "neutral", 12-month target price is $40.00
Desjardins Securities maintains "hold", 12-month target price is $39.25
GMP Securities maintains "tender" 12-month target price is $34.60
Haywood Securities maintains "tender" 12-month target price is $42.75
Sunday 22 June 2008 OTTAWA: SUPREME COURT OPENS WAY FOR HISTORIC TAKEOVER
Canada's Supreme Court has cleared the way for the world's biggest leveraged buyout. In a unanimous decision, the Supreme Court ruled that a group led by the Ontario Teachers' Pension Plan may buy Bell Canada Enterprises, Canada's biggest telecommunications firm. The deal worth CDN$52 billion was put in jeopardy when BCE bondholders went to court, saying that they would lose hundreds of millions of dollars if the deal went ahead. BCE hopes that the deal will be completed before the end of September.
Saturday 21 June 2008 OTTAWA: HIGH COURT APPROVES BELL TAKEOVER
The Supreme Court of Canada has approved the acquisition of BCE Inc., Bell Canada's parent firm. The high court unanimously overturned a decision by Quebec Court of Appeals last month that agreed with aggrieved bondholders that the proposed transaction had harmed their interests. Lawyers representing the bondholders argued unsuccessfully before the Supreme Court that the $34 billion in bank loans required to support the takeover of BCE by a consortium led by Ontario Teachers' Pension Plan reduced their bonds to "junk" status. The high court didn't provide reasons for its ruling but will do so within six months. The final hurdle is the continued support for the transaction by the banks themselves. They've been pressing for changes to the conditions of the loans because of tighter international credit markets. The takeover would be the biggest in Canadian corporate history.
Friday 20 June 2008 OTTAWA: HIGH COURT RULING ON BELL CANADA TAKEOVER DUE
The Supreme Court of Canada will rule on Friday afternoon whether the planned takeover of BCE Inc., Bell Canada's parent firm, may proceed. The high court will decide on an appeal by BCE of a ruling by Quebec Court of Appeals that invalidated the transaction. The lower court agreed with BCE bondholders that the takeover lowered the value of their bonds. The company argued that its directors have no obligation but to increase shareholder value, except to pay the bondholders what they're owed contractually. The $52-billion acquisition would be the biggest corporate takeover in Canadian history.
Sunday 15 June 2008 MONTREAL: HIGH COURT TO HEAR BELL CASE
The Supreme Court of Canada will hold a hearing on Tuesday that could decide the fate of the biggest proposed corporate takeover in Canadian history. A consortium led by Ontario Teachers' Pension Plan has offered $52 billion to acquire BCE Inc., the parent firm of Bell Canada. The takeover was blocked last month when Quebec Court of Appeal agreed with dissident bondholders that their interests had not been taken into account in the proposed transaction. The high court will hear BCE's appeal of that ruling. There have been reports that BCE's board of directors is considering an out-of-court settlement.
Wednesday 11 June 2008 OTTAWA: INVESTMENT FIRM WEIGHS IN AT BCE HEARING
Having been granted intervener status by the Supreme Court of Canada, investment advisory firm Catalyst Asset Management has said in court papers that directors have a duty to ensure that a proposed plan to sell a company is fair to those stakeholder groups affected by it. Catalyst says that conversely a takeover should be rejected if this isn't the case. The company filed its factum as the high court prepares to hear the attempt by BCE Inc. to have a lower court decision that could jeopardize the friendly takeover of a consortium led by Ontario Teachers' Pension Plan for $52 billion, the biggest corporate takeover in Canadian history. Catalyst was granted intervener status because it advanced a different proposal last year to restructure BCE's finances. Quebec Court of Appeal ruled last month that the transaction would adversely affect bondholders and invalidated it. There has been speculation that an out-of-court arrangement could save the deal.
Thursday 29 May 2008 OTTAWA: HIGH COURT HEARS BCE CASE
The Supreme Court of Canada on Wednesday heard the request by BCE Inc., Air Canada's parent firm, for a speedy hearing of its wish to overturn a lower court ruling that invalidated its acquisition. Quebec Appeal Court agreed with BCE bondholders that the proposed $52-billion takeover by a partnership led by Ontario Teachers' Pension Plan was disadvantageous to them and stopped the transaction. BCE's lawyers argued on Thursday that the high court must resolve several important issues, including a definition of the duties which corporate directors owe to creditors, shareholders and other stakeholders. BCE also argues that the court should overturn the lower court ruling because otherwise billions of dollars of value will be destroyed for the country's largest telecom and its many shareholders.
Friday 23 May 2008 BCE's Supreme showdown
As BCE shares plunge, the telco and its would-be buyers are looking to the country's highest court to clear the $35-billion takeover. Concessions for angry bondholders are not in the cards, insiders say
TORONTO, NEW YORK — — The fate of the $35-billion takeover of BCE Inc. [BCE-T] by the Ontario Teachers' Pension Plan will hang on the outcome of a last-ditch appeal to the Supreme Court of Canada, with sources saying that the company and buyers are not interested in a settlement with the bondholders whose legal challenge has thrown the deal into limbo.
Friday 23 May 2008 Bell opens a large can of worms
What does Bell think it's doing by selling TV shows and movies while happily admitting it's using traffic-shaping technology?
Friday May 23, 2008 Bell Canada bond-holders, whose stunning court victory has
stalled the privatization of BCE Inc., said... - Full Story
- Observers say BCE ruling could hit other takeovers
- BCE must kiss and make up
BCE Inc. (BCE : TSX : $32.64) Court grants bondholder's appeal, denied plans of arrangement, BCE and Teacher's group to appeal to Supreme Court
BMO Capital Markets continues "market perform", 12-month target price is $42.75
Credit Suisse First Boston maintains "neutral", 12-month target price is cut to $38.00
Desjardins Securities maintains "hold", 12-month target price is dropped to $34.00
Thursday 22 May 2008 BCE (BCE) - Appeals Court Blocks LBO - Considerable Uncertainty Added
In a surprise move, the Quebec Court of Appeals ruled in favour of contesting Bell bondholders and blocked the transaction. The Court ruled that the BCE Board had a duty to structure a deal (or at least show that they had sought a deal) that gives a satisfactory price for shareholders and attenuates the adverse affects to bondholders. This ruling could have profound effects on future merger and acquisition activity in Canada. Boards would no longer have a duty to just maximize shareholder value. Now Boards must be willing to accept lower takeover prices and show that all minority stakeholders are considered.
BCE and the buyers are seeking an appeal to the Supreme Court. In RBC CM’s non-legal opinion, given the importance of this case to M&A and corporate governance policy in Canada, there is a good chance the case may be heard. Timing and the chances of success, however, are very uncertain. Even an expedited process may take until the fall (at least 60-90 days).
BCE could settle with bondholders through a tender offer at a price that puts bondholders back to a pre-transaction price (a cost of roughly $1.3b), and potentially raising the proceeds through a lower equity price (roughly $1.64/share or a final price of $41.11). Renegotiating the equity price would require a new shareholder vote (~60 days).
RBC CM calculates a $30 NAV for BCE shares, which could provide support over the medium-term. However if the deal is truly "broken" then BCE shares could well trade into the high $20s before ultimately stabilizing.
Wednesday 21 May 2008 BCE Inc. (BCE : TSX : $37.45)
Financiers purportedly attempting to negotiate more favorable terms
Desjardins Securities maintains "hold", 12-month target price is $39.25
Tuesday 20 May 2008 TORONTO: BCE TRANSACTION IMPERILLED
The Globe and Mail newspaper reports that banks involved in the proposed takeover of BCE Inc., Bell Canada's parent firm, are balking against the terms to which they agreed and are demanding a renegotiation of them. According to The New York Times, banks including Citigroup, Deutsche Bank and Royal Bank of Scotland, want new lending terms, one of them being higher interest rates. Ontario Teachers' Pension Plan is leading a consortium that has proposed the acquisition of BCE for US$52 billion in what would be the biggest corporate takeover in Canadian history. BCE shares have consistently traded below the offered price of $42.75 a share.
Monday 19 May 2008 Banks’ Terms Imperil Deal to Buy Out Bell Canada
The $51.8 billion takeover of Bell Canada, the largest leveraged buyout ever proposed, is the latest buyout to run into trouble since the credit market began tightening.
Friday 16 May 2008 BCE (BCE : TSX : $38.95)
Net Change: -0.03, % Change: -0.08%, Volume: 4,846,438 "A nickel ain't worth a dime anymore." - Yogi Berra. The Financial Times reported that banks financing the Clear Channel (CCU) deal have chosen the path of doing a deal and not fighting a court battle, despite the strains on their balance sheets. They argued that though it is not likely the financial bankers can run away, the paper does believe there is some wiggle room just as there was in the Clear Channel deal. We suggested as much yesterday. But keep in mind that the key difference with the BCE proposal is that there was an open auction process and to change the price would likely require others to re-submit (rumour has it a competing bid was $42.25 per share), not to mention the time delays and hefty break fees that would have to be paid. To bother for five bucks? Fine. But to mess around for an extra buck or two net of the break-fee? It doesn't make sense, Yogi.
Friday May 16, 2008 CRTC tells Bell to justify Internet 'shaping'
The country's top telecom watchdog wants BCE Inc. to explain exactly how and why it decided to slow down certain file-sharing...
Wednesday 14 May 2008 BCE Inc. (BCE : TSX : $39.10)
BCE submits all documentation required for CRTC approval
GMP Securities maintains "tender", 12-month target price is $42.75
BCE (BCE : TSX : $39.10), Net Change: 1.00, % Change: 2.62%, Volume: 8,578,267
Elaine: "It shrinks?" Jerry: "Like a frightened turtle!" Elaine: "I don't know how you guys walk around with those
things." Market watchers were waiting to see if the Ontario Teachers' Pension Fund would agree to the amendments asked of it
by the Canadian Radio-television and Telecommunications Commission (CRTC) and yesterday it was revealed that
Teachers' agreed. This could have been used as an excuse to pull out of the deal so it was a relief to shareholders who are
arbitraging this deal. Also, the fate of the Clear Channel (CCU) takeover has been closely watched, as three of the financial
backers had also pledged to finance the BCE deal. Would the banks be able to derail the Clear Channel deal as they hope? At the time of this writing, the willing private equity buyers and bankers were close to renegotiating a US$36 price, down from
US$39.20 originally agreed to. On the one hand, this is positive insofar as the banks appear to be playing along as previously
promised. The bad news is that if the BCE price of $42.75 were similarly reduced by 8.16%, the price would be $39.26. Not
exactly much upside from here relative to the risks, some argue.
Tuesday 13 May 2008 Bell Canada (BCE) announced it has filed with the Canadian Radio-television and Telecommunications Commission all required materials relating to the proposed acquisition of BCE by an investor group led by Teachers' Private Capital, the private investment arm of the Ontario Teachers' Pension Plan, Providence Equity Partners Inc., Madison Dearborn Partners, LLC, and Merrill Lynch Global Private Equity. The filing of these materials was required by the CRTC in connection with its March 27th approval of the transfer of BCE's broadcasting licenses to the investor group.
Thursday 08 May 2008 BCE (BCE : TSX : $36.76), Net Change: 0.20, % Change: 0.55%, Volume: 4,376,063
Oh, yeah. Quarterlies. Profit dropped 45% due to costs in expanding its high-speed network. First quarter net income fell to
$289 million ($0.32 per share), down from $529 million ($0.62) from a year ago. Sales grew less than a percent to $4.39 billion.
The old-school copper-line business is being deemphasized as the company bets on wireless service, high-speed Internet and
satellite TV. Another 106,000 local-phone subscribers were lost last quarter, more than expected. On the other hand, they added
34,000 wireless customers while wireless revenue rose to 8.7% to $1.04 billion. Competitor Rogers (RCI.B) reported a 16%
wireless growth rate last week while Telus (T), the second-largest phone company in Canada, reports today. BCE reiterated its
expectation of the Ontario Teachers' Pension Plan bid of $42.75 to close. Wouldn't you? Separately, the Communications,
Energy and Paperworkers' Union of Canada (CEP) has recommended its 5,000 workers accept the negotiated settlement.
Monday 14 April 2008 BCE (BCE : TSX : $36.76)
Net Change: -0.43, % Change: -1.16%, Volume: 3,011,598 The "C" stands for "Canada", eh? Bloomberg ran an article titled "BCE Investors Bet Record Buyout Will Avoid Clear Channel's Fate", arguing that Canadian banks may be more willing to lend than Clear Channel's (CCU) backers because they made fewer commitments to fund other leveraged buyouts. As reported on April 3, Toronto-Dominion's (TD) CEO said, "We will be there with our money" and not following on the Clear Channel deal is a positive for BCE. "The fact that Teachers' is involved in this, that's probably the key differentiator...there's a great deal of nationalistic price that's involved," said an analyst to Bloomberg. The equity value of the BCE buyout would break TXU Corp's record for the largest leveraged buyout. The bondholder appeal at the end of the month is likely the important step.
Thursday 10 April 2008 MONTREAL: BCE TAKEOVER CLEARS LAST REGULATORY HURDLE
Industry Canada has offered its approval of the acquisition of BCE Inc., Bell Canada's parent firm, by a consortium led by Ontario Teachers' Pension Plan for $52 billion. Teachers' has three American private-equity firms as partners in the consortium. The department's approval is the last regulatory requirement for the deal, approval having already come from Quebec Superior Court and the Canadian Radio-television and Telecommunications Commissions. BCE expects the transaction to be concluded by the end of the second quarter.
Wednesday 02 April 2008 BCE buyout seen proceeding as planned
The $34.8-billion buyout of BCE Inc., the country's biggest telecom company, will get done as it was originally structured...
Bell Canada takes heat from clients for limiting online speed
"Hands off my Internet" is the message Bell Canada is hearing from Canadians this week and last.
Thursday 27 March 2008 OTTAWA: RULING ON MAMMOTH BCE TAKEOVER DUE
The Canadian Radio-television and Telecommunications Commission will announce on Thursday after North American markets close its decision on whether to approve the biggest corporate takeover in Canadian history. A group led by the Ontario Teachers' Pension Plan has offered $52 billion for BCE Inc., Bell Canada's parent firm. The offer is worth $42.75 a share. BCE stock closed at $35.72 Wednesday in Toronto.
Wednesday 26 March 2008 BCE (BCE : TSX : $36.69), Net Change: -0.51, % Change: -1.37%, Volume: 4,471,072
Well, it IS Passover week. After trading yesterday, the Clear Channel (CCU) deal was reported to be dead, sending BCE
shares down after hours (though one can never be certain regular trading action will follow in the same direction). At the end of
the day, only the seller wanted the deal to get done. The buyers and financiers all wanted the deal to fall apart. Citigroup (C)
and Deutsche Bank (DB) were two of the financing partners, as they are in the case of the BCE deal. Though Citigroup,
Morgan Stanley (MS), Deutsche Bank, Credit Suisse (CS), Royal Bank of Scotland (RBS) and Wachovia (WB) all
previously agreed to finance the deal, details of the credit agreement are typically left to the very end. This, apparently, is the
source of the disagreement. The $19 billion privatization is less than half the value of the BCE transaction. On the
Thursday 20 March 2008 BCE (BCE : TSX : $36.20), Net Change: -1.47, % Change: -3.90%, Volume: 3,988,015
If this thing fails to close, we'll all be drinking Teachers. Previously, BCE was expected to close by the end of Q1 but now it
appears it can't happen until the end of Q2. The deal has a shelf-life of June 30 and Canaccord Adams Analyst David Lambert
believes there is little room for error. If the Supreme Court decides to hear the appeal, the closing could be pushed beyond the
June 30 deadline (though the financial backers have committed to a November 2008 deadline). BCE is desperate to see this deal
get done because they aren't stupid, they know the stock would be much lower without it. Teachers’ remains officially
committed the bankers are rumoured to be complaining. One savvy hedge fund long this offer suggested we watch the Clear
Channel transaction, as some of the same financial backers are involved in the BCE deal (we could only spot Citigroup (C) as a
common backer). CNBC's David Faber reported that the Clear Channel deal is not likely to close in the next couple of days (it
should have yesterday) and that the banks are using every means they can to try to get out of the proposal despite being
committed to "a hard contract". Similar pressures are being rumoured to be exerted from Teachers' bankers.
Tuesday 18 March 2008 MONTREAL: BELL BONDHOLDERS APPEAL COURT'S TAKEOVER OKAY
Bondholders of BCE Inc., Bell Canada's parent firm, have appealed in Quebec Court of Appeal a lower court ruling that approved on March 7 BCE's $52-billion acquisition by a group led by Ontario Teachers' Pension Plan. The bondholders' lawyers contend the the lower court judge made errors of fact and law. The bondholders object to the transaction on the grounds that they're unfairly treated because it loads BCE with debt and makes their bonds a riskier investment. The lower court found, however, that the takeover doesn't affect the bondholders rights.
Wednesday 12 March 2008 BCE (BCE : TSX : $38.65), Net Change: 0.93, % Change: 2.47%, Volume: 13,635,762
Back off, eh? Ontario Teachers’ Pension Plan provided proof that the proposed $52 billion BCE buyout conforms to pension
laws and will keep the asset in Canadian hands. The CRTC is expected to make a decision by the end of March but, according to
its Chairman, the concerns about Canadian control have been resolved “by and large”, he said yesterday. However, he did hint
that some conditions may be requested. Teachers’ CEO Jim Leech told reporters, “We stand by the structure we put forward,”
adding, “CRTC approval is a requirement under the contract.” Leech declined to say if Teachers’ would be willing to push
through the deal should the CRTC impose any conditions. This, dear reader, is the big big question. Bankers committed to
the Teachers’ consortium are said to be against the deal so it is possible (even if unlikely) that Teachers’ can use CRTC
conditions as an excuse for not proceeding. BCE, of course, is crossing its fingers and toes in hopes of the deal closing. They
know full well that $42.75 per share is rich, especially in this market and in light of the foreign spectrum allocation.
GATINEAU: TELECOM WATCHDOG CONTINUES DUBIOUS ABOUT BCE TAKEOVER
The Canadian Radio-television and Telecommunications Commission has again expressed reservations about the proposed takeover of BCE Inc., Bell Canada's parent company. The CRTC has for the second time expressed doubt whether the company would continue in Canadian control. Under Canadian law, foreigners cannot control a stake in a telecom bigger than 46.7 per cent. The Ontario Teachers' Pension Plan is leading a consortium comprising three U.S. private equity firms that is offering $52 billion for BCE in what would be the biggest corporate takeover in Canadian history. For the second time, CRTC Chairman Konrad von Finckenstein expressed doubt whether the proposed seating arrangements for the future 13-member board of directors really keeps control in Canada. Teachers' would hold 51.6 per cent of non-voting shares but name only five directors. The CRTC has left the issue in abeyance.
Tuesday 11 March 2008 BCE (BCE : TSX : $37.72), Net Change: 1.92, % Change: 5.36%, Volume: 15,054,894
Bondage is bad. Right, Elliot? Isn't it interesting how at $38 a share, after a widely-expected ruling, the deal risk appears to be
so much lower in many investors' eyes? What has shifted more than anything is perception. Nobody believed the bondholders
alone could kill this deal, yet this represented some $1.7 billion worth of fear (judging by yesterday's trading). The disgruntled
debtholders were beaten badly in court but they do have until March 17 to file an appeal. Such a move would widely be
regarded as having the potential effect of delaying this deal but not derailing it, though delay may well be the only intent here.
The CRTC ruling this week is expected to be a non-issue. The big risk that remains is financing; can the Ontario Teachers
Pension Fund consortium be able to secure the funds? The bankers officially say they are on-side as promised but privately we
hear many of the bankers wish this deal would not go through. The banks are facing capital pressures of their own.
(BCE : TSX : $37.72 | NYSE : US$38.01) Court rules in favour of BCE
Credit Suisse maintains "neutral",
Desjardins Securities maintains "buy", GMP Securities maintains "tender", Haywood Securities maintains "tender", and
RBC Capital Markets maintains "sector perform", 12-month target price is $42.75
Monday 10 March 2008 (BCE) - $35.80 - Court Rules in Favour of BCE
Sector Perform, Average Risk - Price Target: $42.75
On Friday evening, the Québec Superior Court dismissed all bondholder claims and approved BCE’s plan of arrangement. The bondholder lawsuit was a significant risk to the transaction closing, and Friday’s ruling will likely be seen as a big win for BCE shareholders and the buyers. RBC CM expects BCE shares to trade up to $39.00-$40.00 on the news. The bondholders now have 10 days to file an appeal.
Saturday 08 March 2008 MONTREAL: COURT APPROVES BIGGEST TAKEOVER
Quebec Superior Court has approved the $52-billion acquisition of BCE, Canada biggest telecommunications firm, in what would be the largest corporate takeover in the country's history. Bell Canada's parent would be acquired by a consortium led by Ontario Teachers' Pension Plan with several American partners. The court rejected an attempt by bondholders to block the transaction on the grounds that they are being treated unfairly. A ruling in their favour could have delayed or even threatened it. The deal still requires the assent of the Canadian Radio-television and Telecommunications Commission, which began hearings on it last month.
Wednesday 27 February 2008 GATINEAU: BCE TAKEOVER HEARINGS POSTPONED
Canada's telecommunications regulator has delayed its hearings into the acquisition of Bell Canada's parent firm until March 11. The proposed takeover of BCE Inc. for $52 billion would be the biggest transaction in Canadian business history. The Canadian Radio-Television and Telecommunications Commission imposed the delay to give proponents of the deal time to organize proof that it would respect Canadian ownership rules. The law forbids foreign interests to hold more than a 46.7-per cent share of a Canadian telecom. The transaction has been proposed by a consortium led by the Ontario Teachers' Pension Plan together with several U.S. private equity partners.
Tuesday 12 February 2008 BCE Inc. (BCE : TSX : $35.62)
Valuation implies low probability of privatization
GMP Securities maintains "tender", 12-month target price is $42.75
Friday 08 February 2008 (BCE : TSX : $34.72 | NYSE : US$34.32) Q4 in line
Credit Suisse maintains "neutral", 12-month target price is $42.75
Desjardins Securities maintains "buy", 12-month target price is $42.75
RBC Capital Markets maintains "sector perform", 12-month target price is $42.75
Scotia Capital Markets maintains "sector outperform", 12-month target price is $42.75
Thursday Feb 7, 2008 Telesat sale gives BCE big boost
BCE Inc. said yesterday earnings for the fourth quarter of 2007 tripled with a big boost from last autumn's sale of its ...
Wednesday 06 February 2008 BCE Inc. (BCE : TSX : $34.69)
Q4/07 preview; wireless revenue growth may not offset local revenue decline
Canaccord Adams rates a "tender", target price is $42.75
BCE profits from Telesat sale
Canada's largest telephone company posts a $2.4-billion profit in most recent quarter on satellite business sale, but revenue was little changed
Wednesday Feb 6, 2008 BCE Inc. shares climb after earnings release
Tuesday 05 February 2008
(BCE : TSX : $35.74), Net Change: -0.26, % Change: -0.72%, Volume: 8,949,777
Hmm. If bond guys are so smart, how come they couldn’t predict the mortgage-backed asset time-bomb? The Globe and Mail
yesterday ran the article "Bond market bets BCE deal is on", illustrating the fact that credit-default swaps (CDS) are indicating a
70% probability of the deal closing. The CDS market is where bond investors can buy insurance against companies defaulting
on debt. These days, BCE bond insurance is commanding a premium over six times that of Telus (T) or AT&T (T). This
premium reflects the belief that the proposed leveraged buyout will increase the risk for bond holders (who will not be included
in the takeover). A balance sheet newly loaded with debt makes existing life more risky for existing debt holders. If the deal was
believe by the bond market to be dead (as the equity market appears to believe), the credit-default risk premium be much lower.
The article claims "as the CDS market has grown, so has its reputation as a leading indicator for leveraged buyout, often
showing moves well before the equity markets catch on." But CDS spreads can lead you astray, as they did Clear Channel
(CCU) and SLM (SLM). As smart as bond guys are, their crystal balls are known to make mistakes, too.
Friday 25 January 2008 BCE (BCE : TSX : $36.76), Net Change: 1.41, % Change: 3.99%, Volume: 11,094,781
“You don’t have to read my lips, I’m saying.” – Westley Clark. Lawyers for BCE say there is no merit to the bondholders’
lawsuit that claims the sale of BCE is unfair for them. It is true that the $52 billion pending takeover would hurt the value of bonds, as the deal would be financed by adding massive debt. But BCE’s lawyers argue that a risk of an outright sale always
existed and is a risk any debenture holder has to be willing to accept. Besides, they tend to be sophisticated investors who know
this. BCE also says bondholders are using a series of misrepresentations and incorrect or misleading evidence. Some say
bondholders know they can’t win but are merely buying time in hopes of the deal falling apart. But Jim Leeche of Ontario
Teachers’ Pension Plan is getting tired of the doubt of the deal closing, maintaining that their plans to buy BCE have not
wavered. “The intrigue around BCE never seems to end,” Bloomberg reported him as saying. He is receiving calls every day
from investors. “I look forward to the day when BCE is out of the public eye.” Two days ago, he once again pointed that their
plans are “as disclosed in regulatory filings.”
Thursday 24 January 2008 BCE (BCE : TSX : $35.35), Net Change: 0.35, % Change: 1.00%, Volume: 13,813,172Mbr>
Like a re-vamping of the Leafs – proceeding. Bloomberg reported that Ontario Teachers’ Pension Plan’s $52 billion takeover
of BCE is “proceeding”, according to Teachers’ CEO Jim Leech. He also told reports that the financing for the takeover remains
“as disclosed in our filings.” The deal has been approved by shareholders but yesterday the courts heard from Bell’s
bondholders, who do not like the high leverage being utilized by the Teachers’ consortium to do the deal. But the larger
question is can the banks, led by Citigroup (C), sell the bonds needed to support the deal? These banks will not want to wear a
$30 billion issue if the bonds happen to go unsold. Of course, if their clients want to buy it, they won’t have a problem. While
the deal is proceeding as disclosed, a key element is whether Teachers’ and the banks will be able to float the debt required.
Wednesday 23 January 2008 (BCE : TSX : $34.84)
Current value very attractive
Scotia Capital Markets upgrades to "sector outperform", 1-year target price is $42.75
Thursday 17 January 2008 (BCE : TSX : $37.45 | NYSE : US$36.68)
Attrative return if transaction is closed
BMO Capital Markets maintains "market perform", 12-month target price is $42.75
Thursday Jan 3, 2008 moreBCE deal seen on track for second quarter
The $34.8-billion purchase of BCE Inc., the largest take-private deal yet in Canada, remains on track to close in the second...
2007
Monday 17 December 2007 21:21 BCE (BCE : TSX : $38.60), Net Change: 0.24, % Change: 0.63%, Volume: 13,412,798
Here’s the deal on the deal: Shares of BCE were whipsawed on Friday, dipping to a low of $37.25, or 12.9% below the $42.75
takeout bid made by the Ontario Teachers Pension Plan consortium. Apparently, rumours were swirling that indicated that the
definitive agreement between the buy-out consortium and BCE was being renegotiated or outright cancelled due to the
difficulties within the credit markets. Due to the volatility and the rumours, and despite its policy not to comment on rumours,
the company issued a press release denying that the deal was being negotiated. The company stated, that it is “confirming that
neither BCE nor its Board of Directors is involved in any discussions regarding any renegotiation of any of the terms of the
definitive agreement entered into on June 29, 2007.” Got it.
Sunday 09 December 2007 MONTREAL: CABLE FIRMS MAKING INROADS INTO TELEPHONY
Statistics Canada reports that cable operators are making a strong showing in the telephone business in 2006, the first year in which they were allowed to compete. The agency says cable has almost quadrupled numbers of customers to 927,000. StatsCan says the cable firms ability to expand so quickly is impressive, compared with other new services launched over the past decade such as satellite television. Numbers of cable Internet subscribers increased by 17.2 per cent to four million in August 2006. StatsCan also reports that large telecommunications companies like BCE Inc. and Telus Corp. have been steadily losing telephony customers to companies like Videotron, a subsidiary of Quebecor Inc.
BCE Inc. (BCE : TSX : $39.41)
Industry Canada issues spectrum auction rules that ensure a more competitive wireless industry
Canaccord Adams maintains a "tender", target of $42.75
Sunday 11 November 2007 BCE Inc. (BCE : TSX : $40.41)
Closing expected in April
Credit Suisse rates a "neutral", target price is $42.75
Desjardins Securities downgrades to "hold", target price is $42.75
Haywood Securities rates a "tender", target price is $42.75
RBC Capital Markets maintains a "sector perform", target price is $42.75
Scotia Capital Markets rates a "sector perform", 1-year target price is $42.75
Friday 26 October 2007 BCE (BCE) - Teachers' Pension Plan may sell part of its stake in BCE to other Canadian investors once the $52 billion purchase has closed, said Jim Leech, senior vice president of private equity at the fund.
Thursday 18 October 2007 BCE (BCE) will promote George Cope to be chief executive officer, replacing Michael Sabia. Cope when BCE's buyout by the Ontario Teachers' Pension Plan is completed.
Wednesday 17 October 2007 MONTREAL: BONDHOLDERS REVOLT
The National Post newspaper reports that major Canadian bondholders are balking at new Canadian investments in Canada out of anger over the still pending takeover of BCE Inc., Bell Canada's parent firm. According to the newspaper, the bondholders are refusing new investments unless the values of the securities are protected in the event of buyouts or other events. The Post says some of the country's biggest bond managers have refused proposed issues by such major corporations as TransCanada Pipelines Ltd. and Enbridge. The hugely leveraged takeover of BCE by a consortium led by Ontario Teachers' Pension Plan has caused the value of the corporation's bonds to plummet. Three of the institutional bondholders, including CIBC Global Asset Management, Manulife Financial and Addenda Capital have asked Quebec Superior Court to invalidate the transaction. BCE bonds are expected to be downgraded to "junk" status because the proposed takeover would add US$34 billion to its existing debt.
Wednesday 10 October 2007 According to the Globe & Mail, the court approval that BCE had hoped to get on or around October 10th for the takeover to go through has now been delayed until January as the court considers documents filed by two groups of investors in BCE and Bell Canada bonds who argue that the transaction is prejudicial to bondholders. The court will address undisclosed administrative issues Wednesday. The bondholders will then have to file their legal documents by Oct. 19. The court will hear all the proceedings between the parties starting Dec. 3, with final legal arguments the week of Jan. 8. It will make a decision before the end of that month.
Tuesday 02 October 2007 Veritas Vigil - BCE (BCE), National Bank (NA), PrimeWest Energy (PWI.UN)
BCE: Veritas reviewed the BCE deal, and discovered that there is a material adverse change clause condition in the contract with OTP. However, the contract specifically states that “any change in global, national or regional political conditions (including the outbreak of war or acts of terrorism) or in general economic, business, regulatory, political or market conditions or global financial or capital markets;” would not constitute a “Material Adverse Effect”. To Veritas, that suggests there is very little wiggle room in the BCE agreement.
Tuesday 25 September 2007 BCE Inc. (BCE : TSX : $40.18 | NYSE : US$40.02)
Privatization plans approved by shareholders
RBC Capital Markets maintains "sector perform", 12-month target price is $42.75
Monday 24 September 2007 BCE (BCE) - $40.60 - Deal Gets Okay From Shareholders
Sector Perform, Average Risk, Price Target: $42.75
Bell Canada shareholders voted 97% in favour of the privatization by Ontario Teachers Pension Plan, Providence and Madison Dearborn. BCE will seek final approval on the plan of arrangement at Quebec Superior Court on Oct. 10. While a committee of bondholders intends to oppose the court approval, without irreparable harm being caused, an injunction is unlikely to be successful. A follow-on lawsuit is possible, but should not affect current BCE shareholders or the closing. Press reports earlier this week pointed to regulatory delays that could postpone the close to April or May, but RBC CM believes a close in early March is still feasible. CRTC oral hearings are rumoured to be in mid-January, and final CRTC and Industry Canada approvals could take a few weeks. Leaving 20 days for financing, early March close is possible. Even if the close gets delayed, investors stand to benefit from the March 15 dividend ($0.365/sh). Assuming March 1 close, BCE shares offer a 7.6% return (16.4% annualized), or 8.5% (16.0% ann.) to April 1 (including the extra dividend).
Saturday 22 September 2007 MONTREAL: SHAREHOLDERS ACCEPT BCE TAKEOVER
Shareholders of Bell Canada Enterprises Inc. have voted almost unanimously in favour of a takeover offer worth $52 billion in cash and assumption of debt led by the Ontario Teachers' Pension Plan Board. The Board's partners in the deal are two American private-equity firms. The Board will emerge with a 52-per cent share of BCE. The shareholders were told by CEO Michael Sabia, who had been at the helm since 2002, that he has resigned. Mr. Sabia is rumoured to be owed several tens of millions of dollars under the terms of his departure.
Thursday 20 September 2007 more BCE takeover faces regulatory delay
CRTC hearings would stall Teachers' $35-billion deal
...Sources said that a buyout consortium led by Ontario Teachers' Pension Plan and two U.S. partners recently attempted to persuade the Canadian Radio-television and Telecommunications Commission that there was no need for a hearing, given that the bid was all cash, and that majority ownership would reside in Canada.
Wednesday 12 September 2007 BCE Inc. (BCE : TSX : $40.90 | NYSE : US$39.24)
Expecting privatization to close on schedule in Q1/08
RBC Capital Markets maintains a "sector perform", target price raised to $42.75
Friday 07 September 2007 TORONTO: MASTERMIND OF BCE TAKEOVER GETS PROMOTION
Ontario Teachers' Pension Plan, one of Canada's biggest institutional investors, has announced that Jim Leech, its senior vice-president in charge of its private capital division, has been named president and CEO. He'll succeed Claude Lamoureux, who is retiring, on Dec. 1. Mr. Leech engineered the $52-billion takeover of Bell Canada Enterprises Inc. The acquisition was carried out by a consortium led by Teachers, along with two U.S. private equity firms and several Canadian investors. If the transaction gets regulatory and shareholder approval, Teachers' will own 52 per cent of Bell Canada's parent firm. The pension fund has invested more than $16 billion in private equity.
Saturday 25 August 2007 BCE profit climbs 40%
Second-quarter results lifted by sale of a business and other benefits as revenue rises just
Wednesday 08 August 2007 rbc BCE, Inc. (BCE) – shareholder vote date. BCE announced that a special shareholder meeting will be held on Friday, September 21, 2007, at 9:30 a.m. in Montreal. At the special meeting, holders of common and preferred shares registered at the close of business on August 10, 2007 will be asked to vote on the privatization of BCE by, among others, Ontario Teachers' Pension Plan Board and affiliates of Providence Equity Partners Inc. and Madison Dearborn Partners, LLP. A notice of special shareholder meeting and management proxy circular will be mailed to shareholders shortly, filed with applicable regulators and posted on BCE's website.
Thursday 02 August 2007 MONTREAL: BCE TURNS PROFIT
BCE Inc., Bell Canada's parent firm, has reported a second-quarter profit of $667 million, compared with $476 million 12 months previous. The CEO of the country's biggest telecommunications firm, Michael Sabia says the company made progress in stemming its losses from landline telephone service and is improving its mobile phone service sales, although much remains to be achieved. Bell says it has added 63,000 new wireless subscribers but its biggest wireless competitor, Rogers Communications Inc., more than doubled that figure. Meanwhile, Mr. Sabia says the regulatory procedures for his company's acquisition are continuing. Ontario Teachers' Pension Fund and two U.S. private-equity firms will pay $51.7 billion for BCE in the biggest corporate takeover in Canadian history. BCE expects the transaction to be completed in the first quarter of next year.
Thursday 02 August 2007 NBF bce(bce)$39.89 – in line quarter; attractive place to park. RATING: sector perform. tARGET PRICE: $42.75. RISK RATING: low.
BCE continues to trade off in sympathy with other LBO deals as credit market fundamentals worsen. Assuming a Q1 2008 close, the annualized return is now between 15-22% including the dividend. Even if a deal break is realistic, the market appears to be ignoring the previous interest that TELUS has shown in the company. In our view, the worst case scenario is that BCE collects the $1-billion reverse break fee and is forced to look at alternative strategic options such as selling to TELUS or buying back significant shares, both of which would result in a value of at least $36 to $38 per share. In our view, BCE is now an attractive short-term opportunity for traders and long-only investors alike. The current 6.7% spread from the $42.75/share offer is partly due to the uncertain timing of a deal close given the financing risk associated with the high-yield debt market. However, the structure of this deal is such that there are no material change clauses and the presence of a major pension investor as well as at least one bank-funded equity bridge suggests that financing risk is lower than average. Finally, the complexity of the deal is clear enough that we are comfortable estimating a close date of Q1 2008 or earlier.
Thursday 26 July 2007 bce (bce) $40.36 – an attractive place to park. RATING: sector perform (was underperform). tARGET PRICE: $42.75. RISK RATING: low
BCE reports its Q2 results on August 1st. Management will host a conference call beginning at 8:00 a.m. ET. The access number is 866-696-5895. A replay will be available at 800-408-3053 (3230467#). Similar to the past few quarters, the operating outlook this quarter is for flattish revenue and EBITDA. In our view, Bell has the highest potential of all companies in our coverage universe to miss estimates, particularly on the wireless side. Since the cash offer from Teachers was announced last month, the stock has slowly sold off and now trades more in line with other confirmed privatization targets. Assuming the deal closes in Q1 2008, the annualized return is now between 10% and 17%, including the dividend. Given the growing volatility of the broader market and our opinion that the cash offer has a high probability of closing as proposed, we view this spread as attractive. Finally, investors now appear to be getting a free option of a hostile bid from TELUS. In our view, BCE is now an attractive short-term opportunity for traders and long-only investors alike. The current 5.6% spread from the $42.75/share offer is partly because of the uncertain timing of a deal close, though also owing to financing risk associated with the high yield debt market. However, the structure of this deal is such that there are no material change clauses and the presence of a major pension investor as well as at least one bank-funded equity bridge suggests that financing risk is lower than average. Finally, the complexity of the deal is clear enough that we are comfortable in estimating a close date of Q1 2008 or earlier.
<>P>Thursday 05 July 2007 rci MONTREAL: CHANGE COMING TO BCE
The head of the Ontario Teachers' Pension Plan, Claude Lamoureux, says the presumed new proprietors would effect changes at Bell Canada Enterprises Inc. and that "everything is on the table." When questioned by La Presse newspaper whether BCE's current management will remain, Mr. Lamoureux answered that no one will be fired "tomorrow morning," but no promises can be made to anyone. During the weekend, a group of investors led by Ontario Teachers' Pension Plan announced a takeover deal of $51.7 billion, or $42.75 a share. The offer would leave Teachers', already BCE's biggest shareholder, a 52-per cent stake in Bell Canada's parent firm, with Providence Equity Partners having a 32 per cent share, Madison Dearborn nine per cent and unnamed Canadian investors the rest. The takeover would be the biggest in Canadian history. Mr. Lamoureux also acknowledged that the competition for BCE may not be over but that Teachers' has negotiated a "rather high break fee." Canada Pension Plan Investment Board, which includes the U.S. private-equity firm Kolberg Kravis Roberts & Co., says it doesn't intend to bid further. And la Caisse de dépôt et de placement du Québec, which had withdrawn from the consortium before a bid was made, also professes to have lost interest. Telus Corp., another disappointed suitor, refused to comment on Tuesday.
Wednesday 04 July 2007 rci MONTREAL: LOSERS IN BCE BIDDING WON'T RESUBMIT
A losing consortium in the bidding to take over BCE Inc. says it won't make another bid. Canada Pension Plan Investment Board, which includes the U.S. private-equity firm Kolberg Kravis Roberts & Co., says it doesn't intend to bid further. And la Caisse de dépôt et de placement du Québec, which had withdrawn from the consortium before a bid was made, also professes to have lost interest. Telus Corp., another disappointed suitor, refused to comment. During the weekend, a group of investors led by Ontario Teachers' Pension Plan announced a takeover deal of $51.7 billion, or $42.75 a share. The offer would leave Teachers', already BCE's biggest shareholder, a 52-per cent stake in Bell Canada's parent firm, with Providence Equity Partners having a 32 per cent share, Madison Dearborn nine per cent and unnamed Canadian investors the rest. The takeover would be the biggest in Canadian history.
The $51.7-billion pension fund-led buyout of Bell Canada Inc. spells
good news for the Canadian economy so long as...
|
Tuesday 03 July 2007 MONTREAL: BCE'S ULTIMATE FATE STILL IN BALANCE
It's unclear whether the struggle for control of Bell Canada Enterprises Inc. is over. Bell Canada's parent's directors on Friday accepted an offer from a group of investors led by Ontario Teachers' Pension Plan Board, BCE's biggest shareholder, worth almost $52 million, or $42.75 a share. Losers for the time being are Telus Corp., the country's second-biggest telephone firm, and a consortium that includes the American buyout firm Cerberus Capital Management LP. But an unnamed source has told The Globe and Mail newspaper that Cerberus hasn't abandoned its pursuit of BCE. And Telus CEO Darren Entwistle has told the same newspaper that he hasn't decided whether to up the ante. To accept a higher offer Bell would have to pay an $800-million break fee. A spokesman for Teachers' says that it intends to retain the business plan of the current management team for the time being, but will concentrate on improving BCE's performance in the wireless field. The spokesman also said that there's no decision on whether to make the now privatized BCE a publicly-owned company again.
Monday 02 July 2007 TORONTO: CANADIAN-AMERICAN PARTNERS BUY BCE
After wheeling and dealing with several prospective buyers, one of Canada's largest corporations has been sold. Bell Canada Enterprises, or BCE, was sold to a group led by the Ontario Teachers' Pension Plan for CDN$51.7 billion dollars. It's the largest takeover in Canadian history. One of two American partners in the deal is Providence Equity Partners. Earlier in the week, BCE failed to finalize a tentative deal with another giant Canadian telecommunications company, Telus. BCE's board is recommending that shareholders vote to accept the latest offer.
Saturday Jun 30, 2007 Giant takeover Pension-plan group's $51.7-billion deal is largest in Canadian history Ontario Teachers Pension Plan Board has won the bid for BCE with a $51.7-billion deal
Thursday 28 June 2007 more Break fee a chance for BCE to redeem itself
It's time to draw the line on the high cost of takeovers
FP Podcast on cell ohones | Menu
Free-market BCE solution Bernier's pipedream, not his reality
What it means to Rimouski, where Telus is supreme
Wed 27/06/2007 NO ‘BELUS,’ FOR NOW
The
Globe leads, CTV
News goes inside and the
Post, the
Citizen, the
Star and La
Presse lead their business sections with the decision by
Vancouve
|