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Private Equity Consortium Finalizes Financing for BCE Buyout

5:15 am on July 7, 2008 | Category: Business, Corporate


The Ontario Teachers’ Pension Plan and its consortium of private equity partners have reached a final agreement to complete their $52 billion leveraged buyout of Canada’s largest telecommunications company, BCE Inc., by December 11.

Under the terms of the revised agreement, BCE shareholders will receive the original price of C$42.75 per share, but will not receive dividends for the next few months, as some $900 million is set aside to appease several banks that are reluctantly financing the deal.

The BCE buyout, which appeared to be in trouble a few weeks ago as financial institutions threatened to abandon the deal, is now a bright spot in a leveraged buyout market that has been largely crippled by the subprime mortgage crisis and rising borrowing costs.

“BCE’s release is uplifting news, signaling the ability to close transactions with big funding requirements, at least for highly cash-generative assets,” commented managing director, Edward Nash, of CIBC World Markets in Toronto.

BCE shares surged C$4.49, or 13% on Friday, to close at C$39.64 on the Toronto Stock Exchange.

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    Edited by Jeremy Maddock