Bell Canada Enterprises is doing everything in its power to speed up a legal
appeal to the nation’s highest court, in hopes of reversing a lower court’s
ruling blocking a $52 billion buyout of the telecom giant.
BCE announced earlier this week that the Supreme Court of Canada would hear the
case on June 17, and most likely issue a decision in time for a June 30
deadline. Without a favourable judgment by that date, the takeover of BCE by the
Ontario Teachers’ Pension Plan and its private equity partners will not be able
to proceed as planned.
The Quebec Court of Appeal ruled last week that the leveraged buyout agreement –
the largest in Canadian history – is unfair to bondholders, whose investments
will lose value when the newly acquired company takes on more debt. BCE has
argued that the decision “rewrites Canadian law,” and should be reversed as soon
But even if the telecom giant is successful in its appeal, banks could throw a
wrench in the buyout consortium’s financing arrangements. Financial institutions
which initially agreed to finance the deal, are currently trying to back out of
their prior commitments, due to ongoing uncertainty in global credit markets.
In any event the BCE takeover, which seemed like all but a done deal a few weeks
ago, now appears perilously close to failure.
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