BCE now in confirmed talks with three buyout consortiums

6 Jun 2007

Canadian telecoms group BCE has confirmed that it has entered formal talks with a consortium which includes its largest single shareholder, the Ontario Teachers Pension Plan (OTPP), about a possible leveraged buyout. OTPP and its US-based backer Providence Equity Partners signed non-disclosure and standstill agreements with BCE, allowing the group access to the firm’s confidential data to perform due diligence. The group has debt backing from Citigroup, Toronto Dominion Bank and Deutsche Bank. OTPP’s formal entry into talks followed its US regulatory filing on Tuesday disclosing that it had purchased eight million BCE shares in the past two weeks. It now owns 50.8 million shares, or 6.3% of BCE.

BCE is now in buyout talks with three parties. The first group, comprised of Canada Pension Plan Investment Board, Caisse de depot et placement du Quebec and US equity house Kohlberg Kravis Roberts & Co, signed non-disclosure and standstill agreements with BCE on 17 April. A second consortium, consisting of US-based Cerberus Capital Management, Hospitals of Ontario Pension Plan, Hong Kong telecoms billionaire Richard Li and CanWest Global Communications (parent of the National Post), signed on 23 May.

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