Thursday, May 15, 2008

Analysts rework the BCE takeover price

It's highly unlikely the BCE takeover gets re-priced the way the Clear Channel Communications buyout was reworked Tuesday.

But if there's one thing the drama around these private equity deals has taught us, it's that anything is possible.
In that spirit, Desjardins Securities telecom analyst Joseph MacKay took his best shot Wednesday at figuring out what price would feature in a re-cut BCE takeover by the Ontario Teachers Pension Plan and its partners.

Clear Channel agreed late Tuesday to a deal that sees the company fetch 8.16 per cent less than what was agreed to last June, the same month the BCE buyout was struck. Three of the four banks lending on the BCE takeover are also funding Clear Channel buyers Bain Capital and Thomas H. Lee Partners, which is part of the reason the U.S. deal is seen influencing what might happen at the Canadian phone company.

Straight math shows that if the BCE acquisition were redone on the same terms, the company would be bought for $39.25 a share, rather than the $42.75 agreed to last June. That's in line with the current price - BCE is changing hands at $39.22 at midday Wednesday.

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