NEW YORK/OTTAWA (Reuters) – BCE Inc. said on Friday it has not received an offer from private equity funds to take a minority stake in Canada’s biggest telecom company, now that their C$34.8 billion ($26.9 billion) leveraged buyout deal for all of BCE is in jeopardy.
BCE’s statement followed reports on Thursday that the buyers, led by the Ontario Teachers’ Pension Plan, were floating an alternative deal to their original plan to buy the company and take it private.
One source told Reuters that it involved an C$8 billion to C$10 billion investment for a minority stake in the company, which would remain publicly listed.
However, a source familiar with the matter said on Friday that the concept had been shelved overnight because of a lack of interest from the banks contacted for financing. A second source also familiar with the matter said there was a lack of interest in general from the banks made aware of the idea.
“While it is BCE’s policy not to comment on rumors or speculation, in the interest of its shareholders, BCE is today confirming that no such offer has been made,” the company said in a statement on Friday.
The buyout of BCE is on the brink of collapse after accountants ruled a week ago that the company that would emerge from the deal would fail a solvency test because of its huge debt load.
A positive solvency opinion from KPMG, BCE’s accountants, is a condition for the deal to close on Dec. 11 as planned. Without it, the buyout is unlikely to proceed, BCE has said.
BCE said on Friday that it continued to work with KPMG and the purchasers to satisfy closing conditions of the agreement. The buyers group also includes Providence Equity Partners, Madison Dearborn Partners and Merrill Lynch Global Private Equity.
Shares of BCE fell 0.8 percent, or 18 Canadian cents, to C$22.77 on the Toronto Stock Exchange on Friday morning and 2 percent to $17.57 in New York. ($1=$1.29 Canadian) (Reporting by Megan Davies in New York and Susan Taylor in Ottawa; editing by Rob Wilson)