BCE dismisses buyout "rumors and speculation"
Thursday March 29, 12:54 pm ET
TORONTO (Reuters) - BCE Inc. (Toronto:BCE.TO - News; NYSE:BCE - News), Canada's largest telecoms company, is not talking with any private equity investor about taking the company private or about any other similar transaction, it said on Thursday.
BCE, owner of phone company Bell Canada, also said it had no intention of pursuing such discussions and would not comment further on "rumors and speculation," adding it issued its statement at the request of the Toronto Stock Exchange's regulations service.
Earlier on Thursday, the Globe and Mail newspaper said that BCE had held discussions with storied New York buyout firm Kohlberg Kravis Roberts & Co. regarding a possible buyout that would take BCE private.
The Globe said BCE had also had talks with Canadian pension and private-equity funds regarding structuring a transaction that would allow KKR to overcome Canadian regulatory restrictions on foreign ownership of the country's big telecoms firms. The Globe said BCE had hired Goldman Sachs to advise it on strategic options.
A spokeswoman for the Ontario Teachers' Pension Plan, one of the country's biggest institutional investors and BCE's largest shareholder, said "we have a policy of not commenting on rumors, and the one about BCE in today's Globe is no exception."
The BCE statement did not address whether it had retained any investment bank to explore options for its future, but given its firm denial, some said it's unlikely a deal with KKR is looming.
"The story's kind of over, I think," said Joseph MacKay, an analyst at Desjardins Securities. "If anything, the stock remains up because shareholders are hopeful that management will surface some value."
BCE shares initially surged on the Toronto and New York exchanges following the Globe report. By 12:30, the shares were up C$1.86, or 6.2 percent, at C$31.99, in Toronto. In New York, they were up $1.63, or 6.3 percent, at $27.64.
According to Reuters data, BCE had 807.64 million shares outstanding at the end of February. At current prices, that gives the company a market capitalization of C$25.5 billion ($22 billion).
Despite BCE's denial that it was in talks with any private equity firms regarding a buyout, Canada's biggest union of telephone and media workers said it was ready to take "any and all" steps to block a sale to U.S. investors.
Dave Coles, the president of the Communications, Energy and Paperworkers Union of Canada, said in a statement that a sale of BCE to U.S. buyers would be "a direct threat to thousands of jobs, to Canadian economic sovereignty and to our cultural heritage."
To boost its share price and focus on its core Bell Canada unit, BCE has either sold or spun off parts of itself, including the C$3.42 billion sale of its Telesat Canada satellite unit in December.
And, in July, it spun off some of its wireline assets into the publicly traded Bell Aliant Regional Communications Income Fund (Toronto:BA-U.TO - News).
It also planned to convert all of Bell Canada into a tax-advantaged income trust last year, but scrapped those plans in December. That followed the Canadian government's announcement on October 31 that it would begin taxing new trusts in 2007, effectively removing any impetus for a conversion.
($1=$1.16 Canadian) |
