TORONTO (Reuters) - BCE Inc’s C$34.8 billion leveraged buyout could be delayed until the end of the year as the company’s private equity buyers and a syndicate of lenders square off over the value of the deal, The Globe and Mail said on Monday.
The Globe, citing sources, said the banks financing the deal for the Canadian telecommunications company are pushing for a price lower than the proposed C$42.75 a share, and instead, argue that it should be in the range between C$35 and C$38.
The shares closed at C$36.76 on the Toronto Stock Exchange on Friday and at $36.38 in New York.
According to the newspaper, the banks are also seeking stricter covenants, more favorable interest rates and other concessions.
Although the plan was to begin marketing the deal to investors by mid-July and close it sometime in the third quarter, the Globe said several sources do not expect that deadline to be met.
In fact, one source doubted whether the two sides would reach an agreement over the financing terms this summer at all.
If the deal is held off until the end of the year, the company’s cash position could be bolstered by an additional C$900 million.
“Everyone has underestimated when this deal gets done,” The Globe quoted one source close to the deal. “It’s Christmas.”
The newspaper said that BCE was also expected to announce on Monday that there was little chance that it would pay out its C$294 million quarterly dividend.
Reporting by Scott Anderson, editing by Maureen Bavdek