Privatization of BCE closer to completion with court approval, bondholder lawsuit dismissal

By Lisa Kerner

Charlotte, N.C., March 7 - The Quebec Superior Court approved BCE, Inc.'s plan of arrangement for its privatization transaction and dismissed all claims in the Bell Canada debentures lawsuit.

Any appeals to the decision must be filed with the Quebec Court of Appeal by March 17.

The committee filing the suit objected to the plan of arrangement, believing it to be unfair to debenture holders.

According to a committee statement, the proposed plan forces Bell Canada to guarantee $32 billion in loans incurred in the purchase of BCE shares, with nothing given in return.

Committee members hold bonds in Bell Canada, a BCE subsidiary.

Those opposed to the plan arrangement include life insurance companies and money managers in the North American market place, including Barclays Global Investors Canada Ltd., CIBC Global Asset Management Inc., Franklin Templeton Investments Corp. and others.

BCE said it looks forward to closing the privatization transaction with the investor group led by Teachers' Private Capital, the private investment arm of the Ontario Teachers' Pension Plan, Providence Equity Partners, Madison Dearborn Partners and Merrill Lynch Global Private Equity.

It was previously reported that under a July 2, 2007 agreement, the investor group will acquire all of the common shares of BCE not owned by Ontario Teachers for C$42.75 each and all of the company's preferred shares at between C$25.25 and C$25.87 each. The all-cash transaction is valued at C$51.7 billion, including C$16.9 billion of debt, preferred equity and minority interests.

The transaction remains conditioned on approvals from the Canadian Radio-television and Telecommunications Commission and Industry Canada but is expected to close in the first part of the second quarter, a company news release stated.

BCE is a Montreal-based communications company that provides telephone, internet, television and information services.

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