BCE deal kaput

The BCE takeover bid is officially toast.

The purchasing group, led by the Ontario Teachers’ Pension Plan, released a statement early this morning acknowledging that it “terminated the agreement in accordance with its terms.”

The deal fell through after accounting firm KPMG ruled two weeks ago that BCE wouldn’t pass a solvency test, a key condition of the agreement.

Since KPMG was unwavering in its opinion by today’s deadline, the transaction has not proceeded.

“Because KPMG has concluded that a required test for the solvency opinion was not met, this mutual condition to completion of the acquisition could not be, and was not, satisfied,” said the buyers group in a statement. “Accordingly, the purchaser terminated the agreement in accordance with its terms.”

The group added that no termination fee is owed, but BCE is seeking a break fee of up to $1.2 billion.

The buyers group responded with this statement: “It is most unfortunate that BCE is threatening litigation over the failure of a mutual closing condition that the company insisted be included in the original acquisition agreement. It is very clear that neither party has a right to a termination fee in these circumstances. Should BCE commence such baseless litigation, we are confident that it would not succeed.”

(12/11/08)

Staff

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