Leveraged Buyouts Are Dead
Another sign of how the world financial crisis is impacting Canada…
The privatization of BCE Inc. probably won’t happen because the telecommunications giant cannot meet the requirements of a solvency test necessary for the $52-billion deal to close.
The Montreal-based company stunned investors yesterday when it revealed that it had been informed by KPMG that it would not receive a “favourable” solvency opinion by Dec. 11, a condition that BCE had to meet as part of its obligations.
Plus, everyone involved is having a “few” problems of their own.
As a result, the company said “the transaction is unlikely to proceed.”
With buyers sitting on the sidelines, a likely scenario is that BCE will reinstate its dividend and buy back a large chunk of stock from its weary shareholders.
It may have an upside – the stock is a steal, and with a dividend it could once again be the best stock for Canadians.
