Canadian telecom agrees to go private

If approved, the Bell Canada deal would be the country's largest takeover ever.

Published July 1, 2007

TORONTO - Bell Canada agreed Saturday to be bought by a private partnership led by the Ontario Teachers Pension Plan in a deal valued at $51.7-billion Canadian, about $48.5-billion, that would be the largest leveraged buyout ever.

The deal to take Canada's largest telecommunications company private, if approved by shareholders, would also be the largest takeover ever in Canada.

The Ontario Teachers Pension Plan Board, the U.S.-based Providence Equity Partners and Madison Dearborn Partners LLC would buy BCE Inc. for $51.7-billion Canadian, which includes the assumption of $16.9-billion Canadian worth of debt, preferred equity and minority interests, BCE said.

The Toronto-based pension plan - with assets of $106-billion Canadian in 2006 - invests and administers the retirement funds for Ontario's 167, 000 teachers and 104, 000 retired teachers.

The pension plan was BCE's largest shareholder with a 6.3 percent stake.

Michael Hlinka, an independent financial analyst, called the deal unique because it involves a leveraged buyout by a private partnership of a huge public company.

"The system worked in that Bell shareholders were not happy with the current management and ... the way the company was run, " and were able to receive a substantial premium over the share price, Hlinka said.

The investor group will acquire all of the common shares of BCE not already owned by Teachers for an offer price of $42.75 Canadian per common share. The stock closed at $40.34 Canadian on Friday.