Supreme Court sides with BCE

The BCE Inc. takeover has been given the green light by the Supreme Court of Canada. A panel of seven judges voted unanimously to overturn the Quebec Court of Appeal’s decision against privatizing BCE, thereby approving the Ontario Teachers’ Pension Plan’s $35-billion acquisition of the Montreal-based company.

“We are pleased with the Supreme Court’s decision and are continuing to work to complete an acquisition of BCE,” said Ontario Teachers’ Pension Plan CEO Jim Leech.

The decision is a blow to BCE bondholders who battled for a year against the takeover.

They felt BCE had considered shareholder interests but not the investors who hold company debentures.

In May, the Quebec Court of Appeal had sided with the bondholders, which forced the case to the Supreme Court.

Now that the high court has spoken, Teachers’ can move forward with the $42.75 a share offer for BCE and close the deal by June 30.

There is a question of whether the debt financing for the buyout is still solid given the current credit crisis, among other things.

But Citigroup, Deutsche Bank, Royal Bank of Scotland and Toronto-Dominion Bank, the four banks that committed to financing the acquisition, released the following statement Friday: “The banks expect that the transaction will close in accordance with the Definitive Agreement between BCE and the sponsors. We continue to negotiate the financing documents in good faith with the sponsors and stand behind our original commitment to the transaction.”

Filed by ADVISOR Staff, with files from BenefitsCanada.com.

(06/20/08)

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.