Skip to main content | Go to site map | Read our accessibility commitment

News releases

BCE Reaches Definitive Agreement to be Acquired By Investor Group Led by Teachers, Providence and Madison - BCE Board Recommends Shareholders Accept C$42.75 (US$40.13) Per Share Offer

- Offer is 40% premium over "undisturbed share price"
    - Closing targeted for first quarter, 2008

    MONTREAL, June 30 2007 -- 
BCE (TSX/NYSE: BCE) today announced that
the company has entered into a definitive agreement for BCE to be acquired by
an investor group led by Teachers Private Capital, the private investment arm
of the Ontario Teachers Pension Plan, Providence Equity Partners Inc. and
Madison Dearborn Partners, LLC. The all-cash transaction is valued at
C$51.7 billion (US$48.5 billion), including C$16.9 billion (US$15.9 billion)
of debt, preferred equity and minority interests. The BCE Board of Directors
unanimously recommends that shareholders vote to accept the offer.
    Under the terms of the transaction, the investor group will acquire all
of the common shares of BCE not already owned by Teachers for an offer price
of C$42.75 per common share and all preferred shares at the prices set forth
in the attached schedule. Financing for the transaction is fully committed
through a syndicate of banks acting on behalf of the purchaser. The purchase
price represents a 40% premium over the undisturbed average trading price of
BCE common shares in the first quarter of 2007, prior to the possibility of a
privatization transaction surfacing publicly. The transaction values BCE at
7.8 times EBITDA (earnings before interest, taxes, depreciation and
amortization) for the 12-month period ending March 31, 2007.
    "This proposed transaction concludes a comprehensive and disciplined
review of the company's strategic alternatives launched April 17," said
Richard J. Currie, Chairman of the Board of BCE. "It will deliver substantial
value creation for our shareholders. In addition, a majority of the equity
will be owned by Canadians."
    "The transaction delivers to our shareholders the economic benefit of the
work done to focus on our core business and to strengthen Bell with a new cost
structure and new competitive capabilities," said Michael Sabia, President and
CEO of BCE. "All members of the investor group have outstanding track records
in building strong and resilient enterprises and they share our commitment to
customers, our employees and the communities we serve."
    "It is gratifying to see that BCE's Board of Directors shares our vision
for this initiative, and we are honoured to lead the largest buyout
transaction in Canadian corporate history," said Jim Leech, Senior
Vice-President, Teachers' Private Capital, noting that Teachers has been a
major BCE shareholder since the early 1990s. "The Board has recognized our
commitment to BCE's ongoing growth potential, through our proposed investment
strategy. We made it clear in our proposal that we have carefully considered
the potential for BCE and its ongoing status as a Canadian icon. We strongly
believe that all BCE shareholders, Canadian consumers, and employees,
including senior management, who will continue to direct the company from its
headquarters in Montreal, will benefit from this transaction. We look forward
to working together with BCE to make this a reality."
    "This is a unique opportunity to contribute to and participate in the
growth of one of the world's most significant communications companies," said
Jonathan M. Nelson, Chief Executive Officer of Providence Equity Partners.
"BCE offers state of the art services through its sophisticated network that
extends throughout Canada. We look forward to working with BCE's talented
management and employees and our partners to build on the strong platform that
is in place for the benefit of all of the company's stakeholders."
    The equity ownership of BCE would be as follows: Teachers Private Capital
52%, Providence 32%, Madison Dearborn 9% and other Canadian investors 7%.
    The purchaser has obtained a debt commitment to finance the transaction
subject to usual terms for these types of financings. The purchaser
anticipates requiring BCE, Bell Canada and Bell Mobility to redeem outstanding
redeemable debentures maturing up to August 2010 pursuant to their terms as of
and subject to the closing of the transaction. The acquisition debt financing
would become an obligation of BCE and be guaranteed by BCE's then subsidiaries
(other than Bell Aliant Regional Communications Income Fund and Northwestel
Inc.). As to Bell Canada, the purchaser's financing would comply as to ranking
and security with the then existing Bell Canada debentures and medium term
notes issued under the 1976 and 1997 indentures. In addition, the purchaser
has obtained commitments to make available a combination of facilities in
order to support the ongoing liquidity needs for the company.
    The transaction is subject to the customary approvals, including CRTC
approval for the transfer of Bell's broadcast license, and Industry Canada
with respect to the transfer of spectrum licenses.
    The transaction includes a break-up fee of C$800 million
(US$751 million), payable by BCE in certain circumstances and a reverse
break-up fee of C$1 billion payable by the purchaser in certain circumstances.
The transaction will be completed through a plan of arrangement, which will
require the approval of two-thirds of outstanding common and preferred shares,
voting as a class. Shareholders will be asked to vote on the transaction at a
special meeting, the details of which will be announced in due course. The
company anticipates that the transaction will be completed in the first
quarter of next year.
    A proxy circular will be prepared and mailed to shareholders over the
coming months providing shareholders with important information about the
transaction. A material change report, which provides more details on the
transaction, will be filed with the Canadian securities commissions and with
the U.S. Securities and Exchange Commission and will be available at and at
    Legal advisors to BCE are Davies, Ward Phillips & Vineberg, Stikeman
Elliott, and Sullivan & Cromwell. The bid process was led by Goldman, Sachs
and Co. BMO Capital Markets, CIBC Capital Markets and RBC Capital Markets also
acted as financial advisors to the company. Greenhill and Co. provided
independent advice to the Strategic Oversight Committee of the BCE Board of
Directors. The Board received fairness opinions regarding the consideration to
be paid for common and preferred shares from the company's financial advisors.
    Legal advisors to the investor group are Weil, Gotshal & Manges and
Goodmans. Citi is serving as lead mergers & acquisitions advisor to the
consortium. Other financial advisors include Deutsche Banc, Royal Bank of
Scotland and TD Securities.

                                 SCHEDULE A

    The cash considerations payable to the holders of the preferred shares
    are as follows:

        First Preferred Shares               Consideration Per Share
              Series R                             $25.65 (*)
              Series S                             $25.50 (*)
              Series T                             $25.77 (*)
              Series Y                             $25.50 (*)
              Series Z                             $25.25 (*)
              Series AA                            $25.76 (*)
              Series AC                            $25.76 (*)
              Series AE                            $25.50 (*)
              Series AF                            $25.41 (*)
              Series AG                            $25.56 (*)
              Series AH                            $25.50 (*)
              Series AI                            $25.87 (*)

    (*)Together with accrued but unpaid dividends to the Effective Date.

    About BCE Inc.

    BCE is Canada's largest communications company, providing 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 holdings
include Telesat Canada, a pioneer and world leader in satellite operations and
systems management, and an interest in CTVglobemedia, Canada's premier media
company. BCE shares are listed in Canada and the United States.

    About Ontario Teachers' Pension Plan

    With more than $16 billion in assets, Teachers' Private Capital is one of
North America's largest private investors, providing equity and mezzanine debt
capital for large and mid-sized companies, venture capital for developing
industries, and financing for a growing portfolio of infrastructure and
timberland assets worldwide. The CDN$106 billion Ontario Teachers' Pension
Plan is the largest single-profession pension plan in Canada. It is an
independent corporation responsible for investing the fund and administering
the pensions of Ontario's 271,000 active and retired teachers.

    About Providence Equity Partners Inc.

    Providence Equity Partners is the leading global private equity firm
specializing in equity investments in media, entertainment, communications and
information companies around the world. The principals of Providence manage
funds with approximately $21 billion in equity commitments and have invested
in more than 100 companies operating in over 20 countries since the firm's
inception in 1989. Significant investments include Bresnan Broadband Holdings,
Casema, Com Hem, Digiturk, Education Management Corporation, eircom, Freedom
Communications, Idea Cellular, Kabel Deutschland, Metro-Goldwyn-Mayer, Ono,
Open Solutions, PanAmSat, ProSiebenSat.1, Recoletos, TDC, Univision,
VoiceStream Wireless, Warner Music Group, Western Wireless and Yankees
Entertainment Sports Network. Providence is headquartered in Providence,
RI (USA) and has offices in New York, London, Hong Kong and New Delhi.

    About Madison Dearborn Partners

    Madison Dearborn Partners ("MDP"), based in Chicago, is one of the most
experienced and successful private equity investment firms in the United
States. MDP has more than US$14 billion of equity capital under management and
makes new investments through its most recent fund, Madison Dearborn Capital
Partners V, a US$6.5 billion investment fund raised in 2006. Over the past 20
years, MDP's principals have completed over 200 investments. MDP focuses on
private equity transactions across a broad spectrum of industries, including
basic industries, communications, consumer, energy and power, financial
services, health care and real estate. Over the last decade, MDP has been an
active investor in the communications sector, with investments in such
wireless communications industry leaders as Nextel Communications, Nextel
Partners, Clearnet Communications, Omnipoint Corporation, MetroPCS
Communications, and other wireless and wireline telecom companies. MDP has
also been an active investor in the media industry, with investments in such
companies as Telemundo Communications Group, Intelsat, Ltd., Univision
Communications and XM Satellite Radio. For more information, please visit the
MDP website at

    Caution Concerning Forward-Looking Statements

    This news release contains forward-looking statements relating to the
proposed acquisition of BCE Inc., including statements regarding the
completion of the proposed transaction and other statements that are not
historical facts. Such forward-looking statements are subject to important
risks, uncertainties and assumptions. The results or events predicted in these
forward-looking statements may differ materially from actual results or
events. As a result, you are cautioned not to place undue reliance on these
forward-looking statements.
    The completion of the proposed transaction is subject to a number of terms
and conditions, including, without limitation: (i) approval of the CRTC,
Competition Bureau, Industry Canada and other applicable governmental
authorities, (ii) required BCE shareholder approval, (iii) necessary court
approvals, and (iv) certain termination rights available to the parties under
the Definitive Agreement. These approvals may not be obtained, the other
conditions to the transaction may not be satisfied in accordance with their
terms, and/or the parties to the Definitive Agreement may exercise their
termination rights, in which case the proposed transaction could be modified,
restructured or terminated, as applicable.
    The forward-looking statements contained in this news release are made as
of the date of this release. 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. Additionally, we
undertake no obligation to comment on expectations of, or statements made by,
third parties in respect of the proposed transaction. For additional
information with respect to certain of these and other assumptions and risks,
please refer to the related material change report and the Definitive
Agreement to be filed by BCE Inc. with the Canadian securities commissions
(available at and with the U.S. Securities and
Commission (available at

For further information: For BCE inquiries, please contact: Pierre
Leclerc, Bell Canada, Media Relations, (514) 391-2007, 1-877-391-2007,; Bernard le Duc, BCE Investor
Relations, (514)
870-8276,; Ontario Teachers Pension
Plan Board: Deborah
Allan, (416) 730-5347; Providence Equity Partners: George Sard, (212)
687-8080, Andrew Cole, (415) 618-8750; Madison Dearborn Partners: Mark
Tresnowski, (312) 895-1040

SOURCE Corporate

Back to search results
­ ­