p2pnet news view Freedom | P2P:- Bell Canada’s parents are busted. Not in the criminal sense, although given the way they treat the people who keep them in business, that would the appropriate.

Rather, they’re insolvent.

The Canadian arm of numbers cruncher KPMG (Klynveld, Peat, Marwick, Goerdeler), a network of member companies affiliated with KPMG International, a Swiss cooperative, says so.

Investors led by the Ontario Teachers Pension Plan Board said they’d buy BCE, short for Bell Canada Enterprises, with Citigroup, also involved in the EMI debacle, coming up with $11bn of the funding and the Royal Bank of Scotland, Deutsche Bank and Toronto-Dominion Bank paying the balance, says the BBC.

It also pointing out as  well as it is telephone and internet business, BCE owns Telesat Canada, and has an interest in CTVglobemedia, which owns the Globe and Mail newspaper.

But the deal has now officially fallen through.

“Er, do Canada`s teachers — some of them, anyway — owe BCE?” – asked p2pnet.

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,” said 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, 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.”

But it was the recession, says  the BBC.

“The buy-out deal was done just before the credit crunch made such agreements all but impossible, because banks that were struggling with their own liquidity problems were reluctant to loan the huge amounts of cash needed.

And, “No termination fee will be paid by either side,” it says.

In the meantime, “BCE hired PricewaterhouseCoopers LLP to advise the company, while the purchasing group floated the idea of replacing its troubled takeover offer with a minority position through a leveraged recapitalization,” says the Financial Post, adding:

“That idea, which was never formally presented to BCE’s 15-member board of directors, was effectively killed by the lenders. The consortium of banks — Citigroup Inc., Deutsche Bank AG, Royal Bank of Scotland PLC and Toronto-Dominion Bank, which anted up about $33 billion US in debt — can walk away from the deal without fear of legal recrimination because the KPMG solvency receipt did not materialize.”

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p2pnet – `You owe us!` – BCE to Teachers` Fund, November 29, 2008
BBC – Canada’s biggest buyout collapses, December 11, 2008
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
Financial Post – BCE takeover deal falls through, December 11, 2008

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This entry was posted on Thursday, December 11th, 2008 at 9:02 am and is filed under Freedom, P2P. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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