The new deal of Bell Canada
2008-07-05 16:38:10 (GMT) (Caymanmama.com - Business News)New York City, New York (CaymanMama.com) — The largest telecommunications company of Canada, BCE Inc., announced on Friday that it plans to agree to the terms of sale of $35 billion to the Ontario Teachers’ Pension Plan leading group. The deal is expected to be realized by December 2008. The Deutsche Bank, Citigroup, Toronto-Dominion Bank and Royal Bank of Scotland have been slated to finance billions for completing the deal.
BCE said that the acquisition of Teachers Private Capital tied to US investment firms Providence Equity Partners, Merrill Lynch Global Private Equity and Madison Dearborn Partners will be closed by December 11, 2008. After this announcement, the shares in Bell Canada or BCE have moved over 13% more than 39.81 Canada dollars. Shares were trading below the purchasing price for many months as the investors were worried about the banks backing out or reduction in their price.
It has been expected that the credit market will also improve by December. The lower court of Quebec ruled against this transaction but it was finally approved last month by the Supreme Court of Canada.
The Ontario Teachers’ Pension Plan based in Toronto administers and invests in the retirement financial support for 353000 retired, active and inactive teachers of Ontario. The Madison Dearborn Partners LLC and US based Providence Equity Partners have also been involved in this proposed buyout.
The annual revenue of BCE, which has over 54000 employees, was $17.5 billion during 2007. There were 5.8 million subscribers of cordless, 1.82 million subscribers of satellite TV, 1.94 million subscribers of Internet and 8.64 million lines of telephone during 2006.
BCE and George Cop, the new CEO, are expecting to re-focus on the Montreal telecommunications operators as they are facing intense competition under Internet and wireless businesses. The industry analysts are also expecting Bell Canada to intensify efforts for competing more forcefully with the Canadian operators of cable TV like Rogers Communications, Shaw and Videotron.
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