Canadian telecoms group Bell Canada Enterprises (BCE) announced yesterday that it has decided to buy out public minority shareholders in its associated subsidiary telco Bell Aliant for a total consideration of approximately CAD3.95 billion (USD3.68 billion); the minority shareholders will receive cash and BCE common equity for a combined value of CAD31 per share in a transaction which the company said was ‘unanimously recommended by independent Bell Aliant directors’. Following the deal, BCE says Bell Aliant will continue to serve customers in the Atlantic Canadian provinces of New Brunswick, Newfoundland & Labrador, Nova Scotia and Prince Edward Island from its Halifax headquarters, while adding that the regional telecoms operations in rural Ontario and Quebec currently managed by Bell Aliant will continue to benefit from BCE investments in high speed broadband networks and other service initiatives. The announcement added that consolidating Bell Aliant into BCE will improve operating and capital investment efficiencies for Bell Aliant and its larger sister telco Bell Canada; via the elimination of Bell Aliant public company expenses and other duplicative costs, BCE expects to generate approximately CAD100 million in pre-tax annual synergies. BCE currently owns 44.1% of Bell Aliant with the remaining 55.9% publicly distributed on the Toronto Stock Exchange (TSX).
BCE said the share offer (for a total of 127.5 million Bell Aliant common shares) will commence in mid-August and expire in the second half of September, while it expects the privatisation transaction to be completed by 30 November 2014, subject to more than 50% of Bell Aliant common shares held by public minority shareholders being tendered to the offer, as well as receipt of notification under the Competition Act. Telecoms regulatory and ministry approvals are not required because there is no change in control of Bell Aliant, and no transfers of wireless spectrum licences.
BCE will fund the cash component of the transaction from available sources of liquidity and will issue approximately 61 million common shares for the equity portion of the transaction. When the transaction is completed, Bell Aliant public minority shareholders will own approximately 7% of pro forma BCE common equity.
BCE added that it is continuing with significant investments in broadband wireline and wireless networks, services and employment across Atlantic Canada, with CAD2.1 billion in capital investment in the region planned over the next five years. BCE also announced that the next phase of its national build-out of mobile 4G LTE services will be in Atlantic Canada, with more than 100 additional small towns and rural locations across the region to receive enhanced mobile services by the end of 2015.