BCE Inc. has categorically denied the speculations that it plans to be acquired by a big Wall Street buyout firm, following a report of a possible friendly takeover bid for Canada’s largest telephone company. BCE added that its management has no current intention to pursue such discussions. Recently rumor was taking rounds that spread that a U.S. investor is trying to engineer an almost $30 billion takeover of the company.
BCE stock, which is one of the most widely held, in Canada, edged up 11 percent in early trading on news that New York buyout specialist Kohlberg Kravis Roberts & Co. is looking forward to acquire the firm with Canadian partners. However, the shares soon came down when BCE said ‘there are no ongoing discussions being held with any private-equity investor with respect to any privatization of the company or any similar transaction.’
Interestingly, the company did not refute that it has held buyout talks, but said management has no intention to pursue any talks in this direction. BCE chief Michael Sabia has resisted suggestions of a takeover, in the belief that his restructuring and focusing of BCE, including an end to its conglomerate structure and a planned return to the Bell Canada name, would help removing a considerably long period of flat stock-market performance.
However, observers and experts are still weighing the merits of a KKR transaction versus those of a homegrown takeout. Certainly, ff successful, the deal would mark the world’s largest leveraged buyouts, which takes place when debt is used immensely to purchase all the shares of a publicly traded company to then make it private.
On the other hand, few reports suggest that rival Telus Corp. is being may come into fray as a potential suitor for BCE. The deal would create a national communications titan, on conditions that if it is able to clear regulatory hurdles.
