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Report: BCE, buyers arguing break-up fee
Bell Canada Enterprises and the Ontario Teachers Pension Plan- which is leading the BCE buyout plan along with three U.S.-based private equity firms-are haggling over the deal's $1.2 billion break-up fee, according to a report in the Toronto Globe and Mail that quotes unidentified sources. If that sounds like an unheard-of deal termination fee, that's because it is. The acquisition, valued at around $35 billion recently, had been expected to close by Dec. 11. But the closing fell into doubt after independent valuation firm KPMG advised that market conditions and other factors would make it unable to render a solvency opinion.
BCE had disputed the KPMG finding and seemed resolved to proceed, but if this latest report is accurate, the dismantling of the deal could be a more likely outcome.
Also, it may have been long forgotten, but BCE reportedly had not been looking for a buyer until it was coaxed toward a deal agreement by the OTPP and its partners.
For more:
- The Toronto Globe and Mail has the story
Related articles
KPMG's finding last week dealt the BCE buy another setback
BCE had said in October that the acquisition remained on track
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Comments
Posted by Anonymous | December 2, 2008 - 1:04am
What if the Teachers group still wants to buy BCE, does the solvency clause give the banks an escape route?
Posted by J. Smith | December 2, 2008 - 11:23am
All BCE shareholders should list all their shares on the TSX for sale @ $42.75!!!!
