BCE sees Supreme Court lift; Buffett backs Anheuser-Busch, Inbev talks; Chemtura may be LBO target

By Aaron Hochman-Zimmerman

New York, May 27 - A mixed day in stocks still saw most of the major deal names on the plus side, particularly Canada's BCE Inc., which improved as the Canadian Supreme Court agreed to expedite its application for leave to appeal.

Also, Warren Buffett announced his hopes that Anheuser-Busch Cos. Inc. and Belgium's Inbev SA could be more than drinking buddies as whispers of further beverage industry consolidation had investors' ears to the bar.

In more industrial chemicals, Chemtura Corp. was rumored to be in buyout talks with the Blackstone Group and Apollo Management LP.

Elsewhere in media, Time Warner Cable Inc. was believed to be considering a move for Charter Communications Inc.

A session of light deal news saw the Dow Jones Industrial Average higher by 68.72, or 0.55%, at 12,548.35, while the Nasdaq Composite Index added 36.57, or 1.50%, to finish at 2,481.24.

The S&P 500 tacked on 9.42, or 0.68%, to close at 1,385.35.

BCE applies for appeal

Investors were encouraged, if only slightly, by the Canadian Supreme Court, which decided to allow BCE to submit an expedited application for an appeal of the refusal to approve its buyout by a private equity team led by the Ontario Teachers' Pension Plan.

A response to the application is expected by May 30. If an appeal hearing is granted, it will be heard on June 17.

On May 21, the Quebec Court of Appeals unanimously found that the company's bondholders would have suffered more than their share had the record-setting $52 billion buyout been approved by regulators.

The burden would have come in the form of the debt which BCE would have taken on and which knocked the Standard & Poor's rating of the company from investment grade down to BB+, the highest of the high yield ratings.

"I certainly think they're going to give it a lot of attention," an equity analyst said about the Supreme Court, due to its size and implication for Canadian law.

The unanimous decision of the Quebec Court of Appeals will not likely sway the opinion of the Supreme Court "because the court before that didn't find anything, so right now it's one to one. This is the tie breaker," the analyst said referring to the Quebec Superior Court.

Of course, if the appeal is denied, "watch this thing just bottom out, because then it's over," he added, about BCE's share price, which improved on Tuesday.

The company's stock (NYSE: BCE) was better by $1.17, or 3.44%, to $35.17.

Mixed drinks?

Warren Buffett's fraternity brothers of Alpha Sigma Phi at the University of Pennsylvania could not be reached for comment about prior beer-related records, but their most successful alumnus may be on a track to creating the world's largest brewery, reports said.

Buffett, who holds a 5% stake of Anheuser-Busch, is in favor of a merger with Belgium's InBev, a market source said.

Reports of a $65 per share offer from Inbev were heard over the weekend, the source said, which would make put the deal near $49 billion.

Official specifics of the possible deal have not yet been released, but according to the weekend reports "it seems like they're pretty serious; they knew who the advisors were," the market source said, referring to JPMorgan and Banco Santander.

"If it doesn't pan out then someone's lying their asses off," he added.

Besides, "Buffett's a big fan of international stuff," he said.

Shares of Anheuser-Busch (NYSE: BUD) inched up by $0.14, or 0.25%, to finish the session at $56.75.

Chemical compounds

Negotiations are underway between Chemtura and a private equity buyout team made up of Blackstone and Apollo Management, a market source said.

The pair is looking to arrange financing for a proposed deal.

Even with little news of the deal available, investors still reacted favorably.

Shares of Chemtura (NYSE: CEM) were better by $0.69, or 8.85%, to close at $8.49.

Shares of Blackstone (NYSE: BX) took on $0.37, or 2.00%, to end the day at $18.91.

Time Warner Cable sniffs around Charter

Poised to be newly independent of Time Warner Inc., Time Warner Cable has been in an expanding mood, according to reports.

Time Warner is suspected to be mulling over its interest in Charter Communications, the third-largest publicly traded cable operator in the United States with approximately 5.7 million customers, according to Charter's web site.

Shares of Charter (Nasdaq: CHTR) jumped by $0.07, or 5.65%, to $1.31.

Shares of Time Warner Cable (NYSE: TWC) slid by $0.35, or 1.15%, to finish the session at $29.97.

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