BCE buyout in trouble; banks seek new terms: source
PHILADELPHIA (Reuters) - The $34.8 billion (C$34.8 billion) buyout of BCE Inc (BCE.TO: Quote)BCE.N has become more questionable as the banks funding the deal sought to renegotiate the financing terms, a source familiar with the situation said on Monday.
The banks behind the buyout of BCE, Canada's largest telecommunications company and operator of Bell Canada, submitted new financing terms to the buyout group on Friday, the source said.
The new set of terms contained higher interest rates and other "onerous" conditions, the source said. Additional details were not immediately available.
BCE shares were down $1.95, or 5 percent, at $36.86 in afternoon New York Stock Exchange trade.
The New York Times said the new terms submitted by the banks included higher interest rates, tighter loan restrictions and protections that far exceeded the original terms. Negotiations between the buyout group and the banks lasted all weekend, according to the report.
The newspaper quoted one executive who read the revised terms as saying: "It's patently obvious that the banks have no intention of closing the deal."
BCE said on Monday that it expected the deal to close by the end of the second quarter.
"We have been working on all aspects of the transaction, based on the terms set out in the agreement," said company spokesman Bill Fox.
The buyout group for BCE includes the Ontario Teachers Pension Plan; private equity firms Madison Dearborn Partners, Merrill Lynch Global Private Equity and Providence Equity Partners; and Toronto-Dominion Bank (TD.TO: Quote). Continued...