BCE to pay fourth-quarter dividend, will buy back up to 40 million shares

By Lisa Kerner

Charlotte, N.C., Dec. 12 - BCE Inc. announced a plan to return value to its shareholders that includes a reinstated common share dividend and a new normal-course issuer bid.

The fourth-quarter 2008 common dividend of C$0.365 will be paid on Jan. 15 to shareholders of record as of Dec. 23, according to a BCE news release.

BCE said it will repurchase up to 40 million, or approximately 5%, of its outstanding common shares in the normal-course issuer bid, subject to approval by the Toronto Stock Exchange.

"A share buyback is the most efficient method of distributing capital to our shareholders, particularly given the current valuation metrics of the company," BCE chief financial officer Siim Vanaselja said in the release.

"The share buyback will be accretive to earnings per share and cash flow," Vanaselja added.

Bell Canada is also moving forward, BCE said, by executing on five "strategic imperatives": improve customer service, accelerate wireless, leverage wireline momentum, invest in broadband networks and services and achieve a competitive cost structure.

BCE's Bell brand provides local, long-distance and wireless phone services as well as high-speed and wireless internet access.

According to BCE, it will further outline Bell's goals and BCE's capital structure at the shareholders meeting on Feb. 17.

As previously reported, BCE terminated its going-private deal with an investor group led by Teachers' Private Capital, the private investment arm of the Ontario Teachers' Pension Plan.

The investor group, which includes affiliates of Providence Equity Partners Inc., Madison Dearborn Partners, LLC and Merrill Lynch Global Private Equity, claimed it was terminating the deal.

KPMG said it would not be able to deliver to BCE a positive solvency opinion, which was a condition of the transaction's closing, it was previously reported.

BCE, a Montreal communications company, believes it is entitled to a C$1.2 billion break-up fee under the merger agreement. Teachers' Private Capital and its affiliates said neither party has a right to the termination fee.

The investor group had agreed to acquire BCE's common shares it did not already own for C$42.75 each and all of the company's preferred shares at between C$25.25 and C$25.87 each.

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