BCE privatization deal seen on track for 2nd qtr
VANCOUVER, British Columbia (Reuters) - The C$34.8 billion ($35.1 billion) purchase of BCE Inc, the largest take-private deal yet in Canada, remains on track to close in the second quarter of the year, a company spokesman said on Wednesday.
"It's rolling ahead," BCE spokesman Mark Langton said amid some concerns in the market as yet another private equity purchase in the United States was pulled after buyers failed to get financing.
A spokeswoman for the Ontario Teachers Pension Plan, which is leading the consortium buying BCE, said the fund was "forging forward" on the deal. "Our guys are totally focused on the closing," Teachers' spokeswoman Deborah Allan said.
And Toronto-Dominion Bank, which is providing a large C$3.8 billion chunk of the financing for the BCE buyout repeated that it was comfortable with its role and all deal terms remained the same as those announced in July 2007.
"While the deal is a relatively large underwriting, we consider credit risks for BCE to be acceptable for a major Canadian diversified market leader in their industry, and we're quite comfortable with the risk," said Simon Townsend, a spokesman for Toronto-Dominion, Canada's second biggest bank.
The comments from BCE, Teachers and TD came as U.S.-based mortgage and vehicle fleet company PHH Corp said it terminated its nearly US$2 billion sale to General Electric Co and Blackstone Group, after financing for the deal fell through.
Banks and other lenders have turned off the flowing taps of debt to borrowers, which had fueled an acquisition boom by private equity or leveraged buyout buyers in 2006 and early 2007.
Montreal-based BCE, Canada's largest telecom firm, is to be bought at C$42.75 a share. However, its stock is languishing below that as investors ponder if the deal could be delayed, renegotiated or even stopped given the current state of credit markets.
The stock closed down 23 Canadian cents at C$39.42 on a firmer Toronto Stock Exchange on Wednesday. Continued...