Tuesday, July 1, 2008

Bell Canada Finalizes Financing for Privatization, Sabia Steps Down

BCE announced a final agreement with a company formed by an 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. Key terms include:

  • The purchase price will remain $42.75 per common share;

  • The Purchaser and the Lenders have delivered fully negotiated and executed credit documents for the purpose of funding the transaction, including an executed credit agreement and other key financing documents;

  • The reverse break fee payable by the Purchaser in the circumstances contemplated by the definitive agreement has been increased to $1.2 billion;

  • Closing will occur on or before December 11, 2008; and

  • Prior to closing, the company will not pay dividends on its common shares but will continue to pay dividends on its preferred shares.


"The final agreement, with definitive financing now in place, preserves the $42.75 per common share price announced last June, which the Board believes is very much in the best interest of shareholders, the company and Bell Canada, particularly given current capital market conditions," said BCE and Bell Canada Board Chair Richard J. Currie. "As previously announced, BCE secured all third party approvals prior to the June 30 deadline set out in the original agreement," added Mr. Currie.


In addition, Michael Sabia has stepped down as CEO of BCE and Bell Canada. He had previously indicated that he would leave the company once the privitization deal was done. BCE has confirmed George Cope as Mr. Sabia's successor as Chief Executive Officer of BCE and Bell Canada, effective July 11. Cope has served as President and Chief Operating Officer of Bell Canada since October 2005,http://www.bce.ca

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