More funds line up for BCE bid

25 Apr 2007

Three more pension funds are interested in joining a consortium led by Canada Pension Plan Investment Board (CPPIB) to make a private bid for a controlling stake in the country’s largest telecoms group BCE, reports local newspaper The Globe & Mail. According to the paper, the Ontario Municipal Retirement Board, BC Investment Management and Alberta Investment Management are likely to contribute a total of between USD400 million and USD500 million to the bid, although no formal agreement has yet been signed. The CPPIB buyout group already includes US-based private equity house Kohlberg Kravis Roberts (KKR) and two other domestic pension funds – Caisse de Dépôt et Placement du Québec and the Public Sector Pension Investment Board.

A rival consortium comprising the Ontario Teachers Pension Plan (OTPP), US buyout firm Providence Equity Partners and several other Canadian institutions is also preparing a bid for BCE, parent of Bell Canada, and has the financial backing of Citigroup. The OTPP is BCE’s largest single shareholder with a 5.3% stake. BCE’s domestic rival TELUS has rebuffed invitations to join the bidding because of concerns about the large price-tag – BCE has a market value of over USD26 billion – and concerns over whether its involvement would lead to anti-monopoly restrictions.