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BCE and Aliant form one of North America's largest regional telecommunications service providers


This news release contains forward-looking statements.  For a description
    of the related risk factors and assumptions please see the section
    entitled "Caution Concerning Forward-Looking Statements" later in this
    release.

    -  New regional telecom services provider combines Aliant wireline
       assets, Bell's regional lines trust announced February 1st and Bell's
       interest in Nordiq
    -  Consolidated trust to have 3.4 million lines in Ontario, Quebec and
       Atlantic Canada
    -  Change will be seamless for customers, no changes in services or
       prices
    -  Bell to acquire Aliant Mobility, strengthening its national wireless
       strategy
    -  Head office in Atlantic Canada

    SAINT JOHN, New Brunswick and MONTREAL, Quebec, March 7 2006 -- 
BCE Inc. (TSX, NYSE: BCE) and Aliant Inc. (TSX: AIT) today announced they are
creating one of the largest regional telecommunications service providers in
North America. The companies will combine Bell Canada's wireline operations in
its regional territories in Ontario and Quebec, which BCE announced February
1st would be converted into an income trust, with Aliant's wireline operations
and Bell's 63.4 per cent interest in the Bell Nordiq Income Fund (TSX: BNQ.UN)
to form a new consolidated income trust. The trust, which will have
3.4 million local access lines and over 400,000 high-speed Internet
subscribers in six provinces, will be headquartered in Atlantic Canada and
controlled by BCE.
    Bell will also acquire Aliant Mobility and Aliant's DownEast
Communications retail outlets as part of the transaction, strengthening Bell's
national wireless strategy and bringing consumers in Atlantic Canada the most
advanced networks and faster access to the latest in products and services.
    "With a dedicated management team that combines the skills of Bell and
Aliant, and with offices in Atlantic Canada, in Ontario and in Quebec, our
customers will benefit from a team located close to them and focused on their
specific regional needs," said Michael Sabia, President and Chief Executive
Officer of BCE. "In addition, this larger trust will be able to leverage its
size, scale and greater geographic reach to maintain a high quality telecom
infrastructure throughout its service area."
    "This new entity, which is double the size of the current Aliant, secures
a key role for a business headquartered in Atlantic Canada as a leading
provider of wireline communications, including broadband and the latest in
value-added products and services, across eastern Canada and regions of
Ontario and Quebec," said Jay Forbes, President and Chief Executive Officer of
Aliant.
    The transition to the new consolidated trust will be seamless for all
customers of Bell and Aliant. Customers will continue to enjoy the same
products and services, including bundles, and all the benefits of the Bell and
Aliant brands. Products and services will be sold under the Bell and Sympatico
brands within the trust operating territory in Ontario and Québec and the
Aliant and DownEast brands in Atlantic Canada. The Bell Nordiq Income Fund
will continue to trade and operate independently, with no change for its
customers or to operations within its territory.
    "These high quality wireline assets are ideally suited for an income
trust structure, as they will provide stable and predictable cash flows for
unit holders. By establishing an income trust structure, we will generate
significant value for our Aliant shareholders and together with Bell, be able
to compete more effectively in the markets that the trust will serve," said
Mr. Forbes.
    "The consolidation we are announcing today is a further evolution in the
step-by-step process we have undertaken to simplify BCE's asset base and
surface value for our shareholders," said Mr. Sabia. "By creating an expanded
regional service provider, we're making efficient use of our capital and
ensuring control of an asset that is core to our business going forward."
    Upon closing, BCE will hold a 73.5 per cent indirect interest in the
consolidated trust, which it expects to reduce to approximately 45 per cent
through a distribution of units in the trust to BCE shareholders. At closing,
Aliant's minority shareholders will exchange their existing common shares for
units of the new trust, retaining a 26.5 per cent interest therein. Through
governance rights, BCE will control the new trust and hence, will continue to
consolidate the financial results of the trust.
    The location of the trust's head office will enable it to leverage key
elements of Aliant's existing corporate infrastructure to operate the new
company. The trust will also establish regional offices in Ontario and Québec,
and will operate in both official languages. Bell will provide a number of
services to the trust on an outsourced basis. No job losses are expected as a
result of the transaction.

    The Transaction
    On closing, Aliant will contribute all of its operations to a subsidiary
of the consolidated trust, and BCE will contribute its wireline regional
operations and its 63.4 per cent interest in Bell Nordiq Group Inc. to
subsidiaries of the trust. In exchange for its contribution, BCE will receive
Aliant's wireless business including DownEast retail outlets, and upon
completion of the transaction will own a 73.5 per cent indirect interest in
the trust. In addition, approximately $1.25 billion of BCE debt will
effectively be transferred to the trust. BCE currently owns approximately 53.2
per cent of Aliant.
    The distribution by BCE of a portion of its interest to all of its common
shareholders will be effected in conjunction with a reduction of approximately
75 million BCE common shares, or approximately 8 per cent of BCE common shares
outstanding. The transaction is structured so that the value of the trust
units distributed to BCE shareholders is approximately equivalent to the value
of trust units that BCE was anticipating distributing to its shareholders in
the context of the regional lines transaction announced on February 1. BCE
will maintain its current dividend of $1.32 per BCE common share. Following
such distribution of trust units and the simultaneous reduction in the number
of BCE common shares outstanding, BCE shareholders will receive annual cash
distributions of approximately $1.40 in combined trust distributions and post-
exchange BCE common share dividends.
    Pro forma EBITDA and capital expenditures for the consolidated trust in
fiscal 2005 would be approximately $1.4 billion and $525 million,
respectively. It is expected that the trust will take on incremental debt
financing to bring overall leverage to a ratio of approximately 2.0 times debt
to 2005 EBITDA. Pro forma cash available for distribution in fiscal 2005 would
have been approximately $685(1) million. Initially, it is expected that the
consolidated trust will pay out approximately 90 per cent of its cash
available for distribution to its unitholders.
    The trust will be a significant core asset for BCE, with its business
closely aligned with that of Bell Canada for the long term. At closing, Bell
and the consolidated trust will enter into a number of outsourcing and
commercial agreements pursuant to which Bell will support over the long term
the operations of the new trust in Ontario and Québec. Similar agreements will
be entered into between the trust and Bell to support Bell wireless operations
in Atlantic Canada.
    The governance structure of the consolidated trust will be in line with
comparable income trust precedents and will provide, amongst other things,
that BCE will retain the ability to nominate a majority of the Board of
Trustees of the trust and of the Board of Directors of the operating entities
of the trust as long as it owns a 30 per cent or more interest in the trust.
Also, BCE will have the ability to veto certain actions of the new trust and
its operating entities (approval of business plan, significant corporate
transactions, material changes in business, leverage in excess of 2.5 times
debt to EBITDA, appointment and change of Chief Executive Officer and material
commercial agreements with competitors of BCE) as long as it owns a 20 per
cent or more interest in the new trust.
    The dividend on Aliant's common shares, currently being paid at an annual
rate of $1.24 per share, will be paid quarterly until closing of the
transaction. Aliant shareholders who are resident in Canada and who will
exchange their shares of Aliant for trust units will generally realize a
capital gain (or capital loss) equal to the amount by which the fair market
value of the trust units received exceed (or is less than) the cost of their
Aliant shares.
    The distribution of a portion of BCE's interest in the consolidated trust
to its shareholders is expected to result in a tax deferred distribution to
BCE shareholders resident in Canada. The distributions to U.S. shareholders
should not be subject to any Canadian non-resident withholding tax. However,
due to restrictions under the U.S. Investment Company Act, it is anticipated
that non-institutional U.S. shareholders of BCE would receive the net proceeds
of the sale of the trust units, rather than the trust units themselves.
    The transaction is expected to close as early as the third quarter of
2006 once all closing conditions are met, including, without limitation,
receipt of: favourable advance income tax rulings from the Canada Revenue
Agency, approval by the Canadian Radio-television and Telecommunications
Commission, an advance ruling certificate from the Competition Bureau,
securities commissions', other applicable regulatory and stock exchange
approvals, possible third party consents on satisfactory terms, approval by
Aliant's shareholders, and necessary court approvals, as well as the arranging
of satisfactory bank financing. The subsequent distribution of trust units by
BCE is subject to various conditions including approval by BCE's shareholders
and necessary court approvals. Aliant expects to mail relevant proxy materials
to its shareholders in April and to hold its shareholders meeting to approve
the transaction in May. The shareholders of BCE will be asked separately to
approve the subsequent distribution of trust units, but this will not be a
condition to the establishment of the new trust. It is expected that such
approval will be sought at BCE's Annual General Meeting to be held on June 7.
    The board of directors of Aliant, after receiving legal and financial
advice and following the review and receipt of recommendations from its
independent committee of directors and its financial advisors (including
advice and a fairness opinion from Scotia Capital Inc., hired as exclusive
advisor to the Committee, and an independent fairness opinion and valuation
from TD Securities Inc.) unanimously approved the transaction on the basis
that it is in the best interests of the company. The board of directors of
Aliant recommends this transaction to its shareholders. BCE was advised by RBC
Capital Markets and Goldman, Sachs & Co.
    The trust units of the consolidated trust have not been and will not be
registered under the U.S. Securities Act of 1933 and may not be offered or
sold in the United States absent registration or an applicable exemption from
the registration requirement of such Act.
 
    About BCE Inc.
    BCE is Canada's largest communications company. Through its 28 million
customer connections, BCE provides the most comprehensive and innovative suite
of communication services to residential and business customers in Canada.
Under the Bell brand, the Company's services include local, long distance and
wireless phone services, high-speed and wireless Internet access, IP-broadband
services, information and communications technology services (or value-added
services) and direct-to-home satellite and VDSL television services. Other BCE
businesses include Canada's premier media company, Bell Globemedia, and
Telesat Canada, a pioneer and world leader in satellite operations and systems
management. BCE shares are listed in Canada, the United States and Europe.

    About Aliant
    From its home base in Atlantic Canada, Aliant delivers a wide variety of
innovative and traditional communications services, including local and long
distance telephony, wireless, Internet, e-commerce, interactive multimedia,
data and managed network services, to more than two million consumers and over
80,000 enterprises. Aliant complements its industry-leading telecommunications
business with strengths in information technology solutions and knowledge-
services applications. Aliant's approximately 8,400 employees build on its 100-
plus year history by collaborating to deliver the highest quality of customer
service, choice, and convenience. Aliant has a market capitalization of
approximately $3.7 billion.

    BCE Caution Concerning Forward Looking Statements
    Certain statements made in this press release, including, but not limited
to, the future financial condition and results of operations of BCE, Aliant
and the new regional lines income trust, the expectation that the creation of
the new trust will provide stable and predictable cash flows for unitholders,
the proposed distribution of trust units to BCE shareholders, BCE's
anticipated remaining interest in the new trust, the tax treatment of BCE and
Aliant shareholders, the expectation that BCE shareholders will receive value
from this proposed transaction consistent with the value BCE anticipated
distributing to shareholders in the context of the regional lines transaction
announced on February 1, 2006, the expected increase in the value of
distributions to BCE shareholders, the expected increase in the equity value
of the assets involved in the proposed transaction, the expected seamless
nature of the transition to the new trust for customers, the expected closing
date of the proposed transaction and other statements that are not historical
facts, are forward-looking statements and are subject to important risks,
uncertainties and assumptions. In particular, in making these statements, BCE
has assumed, among other things, that the proposed transaction and subsequent
distribution by BCE of units in the new trust will receive the required
regulatory and securityholder approvals and that the other conditions to the
transaction can be satisfied in accordance with their terms. The results or
events predicted in these forward-looking statements may differ materially
from actual results or events. As a result, readers are cautioned not to place
undue reliance on these forward-looking statements.
    Certain of the 2005 pro forma financial results of the new trust have
been prepared by management on the basis of unaudited financial information
for the year ended December 31, 2005. The actual results for the year ended
December 31, 2005 may vary from the amounts discussed herein as a result of
year-end adjustments made in connection with the preparation of audited
financial statements or otherwise, and such variation may be material. In
addition, the actual results of the new trust in the future will likely vary
from the amounts discussed herein.
    The pro forma combined trust cash distribution and BCE common share
dividend has been prepared by management making a number of assumptions
including, but not limited to, a reduction of approximately 8% in the number
of BCE common shares outstanding following the proposed transaction, BCE
owning approximately 45% of the new trust after distributing a portion of its
interest to BCE common shareholders on a pro rata basis, pro forma cash
available for distribution of approximately $685 million and the expectation
that, initially, the trust will pay out approximately 90% of its cash
available for distribution to its unit holders.
    Other factors that could cause results or events related to the proposed
transaction to differ materially from current expectations include, among
other things: the fact that the proposed transaction involves the integration
of various operations previously operated independently and that there can be
no assurance that the combined operation resulting from the proposed
transaction will realize the anticipated synergies, or that other benefits
expected from the transaction will be realized; our ability to complete the
proposed transaction without adverse effects on the customers of Bell Canada,
Aliant or the new trust; the ability of the trust to make cash distributions
(the trust's financial results and ability to make cash distributions will be
subject to various risks including, without limitation, intensity of
competitive activity, general economic and market conditions, the level of
consumer confidence and spending and the demand for, and prices of, the
trust's services, the impact of pending or future litigation or regulatory
proceedings, and the other risk factors applicable to BCE companies).
    For additional information with respect to certain of these and other
assumptions and risk factors, please refer to the Safe Harbor Notice
Concerning Forward-Looking Statements dated February 1, 2006 filed by BCE with
the U.S. Securities and Exchange Commission, under Form 6-K, and with the
Canadian securities commissions. The forward-looking statements contained in
this press release represent our expectations as of March 7, 2006 and,
accordingly, are subject to change after such date. However, we disclaim any
intention and assume no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise.

    Aliant Caution Concerning Forward Looking Statements
    This news release contains forward-looking statements. These statements
are based on current expectations and estimates, as of March 7, 2006, about
the markets in which we operate and management's beliefs and assumptions
regarding these markets. These statements include, but are not limited to
statements that relate to the future financial condition and results of
operations of Aliant and the new trust, the expectation that the creation of
the new trust will provide stable and predictable cash flows for unitholders,
the tax treatment of Aliant shareholders, the expected seamless nature of the
transition to the new trust for customers, the expected closing date of the
proposed transaction, the expected quarterly payment of dividends on Aliant's
common shares until the closing of the transaction, and other statements that
are not historical facts. These statements are subject to important risks and
uncertainties which are difficult to predict and assumptions which may prove
to be inaccurate. Moreover, the proposed transaction involves the integration
of two operations previously operated independently. No assurance can be given
that the combined operation resulting from the transaction will realize
anticipated synergies, or that other benefits expected from the transaction
will be realized.
    In making these statements, Aliant has assumed, among other things, that
the proposed transaction will receive the required regulatory and shareholder
approvals and that the other conditions to the transaction can be satisfied in
accordance with their terms. For additional information regarding these and
other key assumptions and risk factors, please refer to Aliant's Notice
Concerning Forward Looking Statements dated January 26, 2006.
    Should any factor impact Aliant or the new trust in an unexpected manner,
or should assumptions underlying the forward-looking statements prove
incorrect, the actual results or events may differ materially from the results
or events predicted. All of the forward-looking statements made in this
document are qualified by these cautionary statements, and there can be no
assurance that the results or developments anticipated by Aliant will be
realized or, even if substantially realized, that they will have the expected
consequences for Aliant. We undertake no obligation to publicly revise these
forward-looking statements to reflect subsequent events or circumstances.
Readers should not place undue reliance on any forward-looking statements,
which reflect management's plans, estimates, projections and views only as of
the date hereof."

    Notes:
    (1) Estimated distributable cash of $685 million represents management's
    estimate and is calculated by subtracting capital expenditures and
    interest expense from estimated EBITDA of approximately $1.4 billion.
    Distributable cash is an operating performance measure that is generally
    used by Canadian income funds as an indicator of financial performance.
    Distributable cash is not a recognized measure under Canadian generally
    accepted accounting principles and does not have a standardized meaning.
    Distributable cash as presented above may not be comparable to similar
    measures presented by other issuers. EBITDA does not have any
    standardized meaning prescribed by Canadian generally accepted accounting
    principles. It is therefore unlikely to be comparable to similar measures
    presented by other companies. We believe that certain investors and
    analysts use EBITDA to measure a company's ability to service debt and to
    meet other payment obligations, or as a common valuation measurement in
    the telecommunications industry.

    Call with Financial Analysts
    BCE and Aliant will hold a joint teleconference for financial analysts to
discuss this announcement on Tuesday March 7, 2006 at 8:30 a.m. (Eastern).
Media are welcome to participate on a listen only basis. Michael Sabia,
President and CEO of BCE and Jay Forbes, President and CEO of Aliant, will
participate in the teleconference.
    To participate, please dial 416-641-6105 or 866-696-5895 shortly before
the start of the call. A replay will be available for one week by dialing 416-
695-5800 or 1 800-408-3053 (pass code: 3178837 pound key). This teleconference
will also be Webcast live and archived for one week on BCE's website at
http://www.bce.ca/en/news/eventscalendar/webcasts/2006/20060307/ and
on Aliant's website at www.aliant.ca.

    Call with the Media
    BCE and Aliant will hold a teleconference for media to discuss this
announcement on Tuesday March 7, 2006 at 11:00 a.m. (Eastern). Michael Sabia,
President and CEO of BCE and Jay Forbes, President and CEO of Aliant, will
participate in the teleconference.
    To participate, please dial 514-868-1042 or 1-866-898-9626 shortly before
the start of the call. A replay will be available for one week by dialing 514-
861-2272 or 1-800-408-3053 (passcode 3178945 pound sign).





For further information: Pierre Leclerc, BCE Media Relations, (514)
391-2007, 1-877-391-2007, pierre.leclerc@bell.ca; Thane
Fotopoulos, BCE
Investor Relations, (514) 870-4619, thane.fotopoulos@bell.ca; Kelly
Gallant, Aliant Media Relations, (902) 487-4642, Kelly.gallant@aliant.ca;
Ian Chadsey, Aliant Investor Relations, (506) 647-9597,
ian.chadsey@aliant.ca
To request a free copy of this organization's annual report, please go to
http://www.newswire.ca and click on reports@cnw.

SOURCE Bell Aliant

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