BCE confirms buyout talks

18 Apr 2007

BCE, the parent of Bell Canada, said yesterday that it was discussing the possibility of taking itself private with three Canadian pension funds and US-based private equity group Kohlberg Kravis Roberts (KKR). The announcement came after reports that BCE’s largest shareholder, the Ontario Teachers’ Pension Plan (with 5.3%) was considering a plan to form a consortium to make a bid for a controlling stake in BCE, which has a market value of over USD26 billion. In a statement, BCE said it would look at other possibilities ‘to further enhance shareholder value’ and added that it might decide against taking any action at all. Because Canadian law limits foreign ownership of telecommunications companies to 46.67% of voting equity, KKR would act as a minority partner in a consortium led by the Canada Pension Plan Investment Board (CPPIB). The CPPIB now hopes to bring in the Caisse de Dépôt et Placement du Québec, which manages public and government worker pension funds in Quebec, as well as the Public Sector Pension Investment Board, which holds funds for federal government employees, the armed forces and the Royal Canadian Mounted Police. The CPPIB, which manages the funds held by Canada’s national public pension programme but operates at arm’s length from the government, says that it first considered making a bid with just KKR as a partner in the summer of 2006.

Canada, BCE (old), Bell Canada Enterprises (BCE)