"BCE has hoisted itself on its own petard.'' So quoth an unnamed executive in The Wall Street Journal today, referring to the BCE takeover. The deal officially has come undone due to BCE's inability to earn a positive solvency opinion, an opinion which it sought as a requirement for the completion of the acquisition. And there may be no more suitable way to describe such an unintended explosion of a mega-deal than to paraphrase "Hamlet."
BCE's would-be buyers--the Ontario Teachers' Pension Plan, Providence Equity Partners LLC, Madison Dearborn Partners LLC and Merrill Lynch Global Private Equity--issued a joint statement announcing the deal's termination. As the WSJ explains, the deal blew apart (like a petard) because of the failure to earn a solvency certificate, which is ironic, because the certificate was part of BCE's own attempt to create a shield against possible future lawsuits from its own bondholders (it has already faced one such lawsuit).
The buying partners indicated they won't be held responsible for a $1.2 billion breakup fee, which means the next stop for all parties involved probably will be the courthouse-except for the four banks who would have funded the deal, who now get to walk away without forking over the necessary debt.
The Wall Street Journal reports
BCE deal participants reportedly have been debating the break-up fee for a while
The BCE deal seemed to be on track as recently as last month