By Angela McDaniels
Seattle, July 2 - BCE Inc. has entered into a definitive agreement to be acquired by an investor group led by Teachers Private Capital, the private investment arm of the Ontario Teachers Pension Plan, Providence Equity Partners Inc. and Madison Dearborn Partners, LLC.
Under the terms of the transaction, the investor group will acquire all of the common shares of BCE not owned by Teachers for C$42.75 each and all of the company's preferred shares at between $25.25 and $25.87 each. The purchase price represents a 40% premium over the average trading price of BCE common shares in the first quarter of 2007, according to a company news release.
The all-cash transaction is valued at C$51.7 billion, including C$16.9 billion of debt, preferred equity and minority interests.
The BCE board of directors unanimously recommended that shareholders vote to accept the offer. Shareholders will be asked to vote on the transaction at a special meeting, the date of which is to be determined.
The transaction is subject to the customary approvals, including approval by holders of at least two-thirds of the outstanding common and preferred shares, official approval for the transfer of Bell's broadcast license and official approval for Industry Canada with respect to the transfer of spectrum licenses.
The company expects the transaction to be completed in the first quarter of 2008.
Following a successful acquisition, the equity of BCE would be owned 52% by Teachers Private Capital, 32% by Providence, 9% by Madison Dearborn and 7% by other Canadian investors.
"This proposed transaction concludes a comprehensive and disciplined review of the company's strategic alternatives launched April 17. It will deliver substantial value creation for our shareholders. In addition, a majority of the equity will be owned by Canadians," Richard J. Currie, chairman of the BCE board, said in the release.
The investment group has obtained a debt commitment to finance the transaction and commitments for new credit facilities to support the company's liquidity needs, the release stated.
The transaction includes a break-up fee of C$800 million payable by BCE and a reverse break-up fee of C$1 billion payable by the purchaser.
BCE is a Montreal-based communications company that provides telephone, internet, television and information services.
| Acquirers: | Teachers Private Capital, Providence Equity Partners Inc. and Madison Dearborn Partners, LLC
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| Target: | BCE Inc.
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| Transaction total: | C$51.7 billion
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| Payment per share: | C$42.75
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| Break-up fee: | C$800 million
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| Announcement date: | June 30
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| Expected closing: | First quarter of 2008
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| Stock price of target: | Toronto: BCE; C$39.59 on June 29
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