Canada's BCE Agrees to Buyout

The telecom company will go private in an all-cash deal valued at $48.5 billion.
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BCE

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has agreed to be taken private in an all-cash deal valued at $48.5 billion, the Canadian telecom company announced Saturday.

It's the largest buyout in Canadian corporate history, according to the investor group that has agreed to buy BCE. The group is led by Teachers Private Capital (the private investment arm of the Ontario Teachers Pension Plan), Providence Equity Partners and Madison Dearborn Partners.

The investors plan to pay $40.13, or C$42.75, per share for BCE, which owns the Bell brand in Canada. The deal also includes $15.9 billion, or C$16.9 billion, worth of debt, preferred equity and minority interests.

The price represents a roughly 6.0% premium to where BCE's shares finished trading Friday. The company's stock closed in New York up 34 cents at $37.79, and in Toronto up 75 Canadian cents at C$40.34.

BCE said, however, that the price represented a 40% premium to the average trading price of its shares during the first quarter, before investors became aware that the company might be a buyout target.

BCE's board has approved the deal.

"This proposed transaction concludes a comprehensive and disciplined review of the company's strategic alternatives launched April 17," said Richard J. Currie, Chairman of the Board of BCE. "It will deliver substantial value creation for our shareholders. In addition, a majority of the equity will be owned by Canadians."

Should the deal go through, the equity ownership of BCE would be as follows: Teachers Private Capital 52%, Providence 32%, Madison Dearborn 9% and other Canadian investors 7%.