‘You owe us!’ – BCE to Teachers’ Fund
p2pnet news view Freedom | P2P:- Er, do Canada’s teachers — some of them, anyway — owe BCE?
And did it bend over backward to make the Ontario Teachers’ Pension Fund / BCE deal happen?
That’s the view of at least one person, “close to BCE” as the two sides apparently feud, “over a $1.2-billion termination fee,” says the Globe and Mail.
Plans for the $52-billion take-over of Bell Canada, “the country’s largest and most hated provider, are about to come crashing down, it seems,” p2pnet posted on Thursday, going on:
“Nor is the looming recession responsible. ‘Bell parent BCE Inc. said yesterday a KPMG analysis indicates the telecom giant cannot meet solvency tests defined in the agreement under which the company will be acquired by an investor group led by the Ontario Teachers’ Pension Plan,’ says the Canadian Press.”
Now, “legal experts who declined to be identified said BCE’s board is under enormous pressure to retrieve what compensation it can from Teachers,” says the story, adding:
“BCE cannot be seen at this stage to allow Teachers to walk away without a tiger claw fight,” says the story, quoting an (the same?) anonymous source.
Under the terms of the deal, “the pension fund must pay what is known as a reverse break fee if its actions trigger the deal’s collapse,” says the story, adding:
“Legal experts said that to win the fee, technically BCE would have to demonstrate that Teachers gave KPMG’s auditing team incomplete or erroneous information for their solvency analysis.
“KPMG concluded from data supplied by BCE and Teachers that the company would not meet a solvency test because its debts would exceed its assets after $32-billion of takeover debt was tacked onto the company. According to sources, KPMG estimated Teachers would have had to inject an additional $3-billion of equity to ensure BCE’s solvency. BCE disputes the findings and a team of senior financial officers are reviewing the analysis with the auditing team.
“It is understood that Teachers strongly disputes any wrongdoing, but the pension fund may opt to negotiate paying a lower break fee to BCE to avoid a messy and protracted legal dispute.”
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Globe and Mail – BCE pressing Teachers for fee payment, November 28, 2008
most hated provider – p2pnet traffic shaping digest, April 19, 2008
p2pnet – BCE, Teachers Union deal: on the rocks?, November 27, 2008
Canadian Press - Bell takeover in doubt, November 27, 2008
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November 29th, 2008 at 11:46 am
consider me clueless Jon..
How are teachers related to Bell Canada, obviously your ‘most hated telecom provider’? I understand that some financial review of Bell Canada seems to state that a buyout (good news) would include 32billion of additional debt, however, how are the teachers involved? Did they do the financial review and goofed some how, hence they are responsible for the deal collapse? Or are the teachers some how associated with the entity doing the buyout review?
November 29th, 2008 at 11:59 am
To surfer – OTTP – “An independent organization, it invests the pension fund’s assets and administers the pensions of 278000 active and retired teachers in Ontario”
http://www.otpp.com/wps/wcm/connect/otpp_en/home
November 29th, 2008 at 12:35 pm
aha, ok, so the OTTP is looking to invest in Bell Canada. That’s quite the pension fund if they can afford something like a telecom provider.
I wish them the best of luck, from what I understand, ANYTHING would be better than who currently owns Bell Canada.
November 29th, 2008 at 12:52 pm
^^ “That’s quite the pension fund ….”
It was the biggest corporate takeover in Canadian history – http://www.cbc.ca/money/story/2007/06/30/bce-teachers.html
Cheers!
November 29th, 2008 at 12:54 pm
The Teachers Pension Fund has already lost a pile of money in Maple Leaf (there are others I am told) and now they will have to take a hit on the BCE. What irks me is that another company wanted to buy BCE when the Teaches jumped on the deal with their U.S. money backers. They should be heavily fined because the firm who made the offer was going to pay close to the $42.00 mark. If the truth be known, the Teachers were “scammed” by Goldman Sacks and the other players who saw big returns on their contributions. I have lost a large sum of money because I believed the analysts when they said it was a “done” deal. I am as dumb as the Teachers Pension executive. In my heart of hearts, I hope they get heavily fined by BCE….they deserve it for their shoddy management of the buy-out.
November 29th, 2008 at 5:00 pm
The Teachers should of did some talking around to ordinary customers of Bell, as they are very familiar with Bell’s “Termination” Fees. lol
November 30th, 2008 at 1:35 pm
Oh yeah.
We all know about Bell’s passion for extorting a “termination fee” from just about every situation, but they’ve got to be the first I’ve ever seen to try applying such a fee to a contract that hasn’t even been signed yet!…
…oh wait!… what am I saying?!
: )
December 1st, 2008 at 1:20 am
Its surprising that the pundits are surprised by the BCE collapse. What are you thinking? A billion last year=2 billion today. Memo: when your lender goes bust before the deal- that’s a red flag. RBS and Citi would both be gone without bailouts. Why o why can’t these so called media commentators come up to speed? You have to extrapolate ( project) the trend into the future. Deflation is accelerating. If the buy out had gone through BCE would be bust in 2-5 years.
December 1st, 2008 at 4:37 am
Maybe that was that plan?
Sell it then be forced to sell of its pieces.
December 1st, 2008 at 12:37 pm
I had phoned BCE investors relations on November 24 , 2008 and asked if all the conditions for the deal have been satisfied and she advised me that hte deal will close and you will get the money one or 2 days after the december 11, 2008. upon her advise i did not sell my stock which i was intended to sell otherwise. on wednesday we were advised that BCE could not satisfy the main condition of its post solvency. i phoned BCE again and she advised me that they were all taken by surprise. i am shocked at the misleading statements made by the BCE representatives and they knew that this report was being prepared since august and clean certificate had not been handed over to them by the KPMG. i feel that the shareholders should have been advised of this condition which had yet to be met. there should be tranparency by the public company so that the shareholders can make informed decision. i feel one should be able to sue BCE for misleading the shareholders. it is very upsetting that they can get away with everything