TORONTO (Reuters) – BCE Inc. (BCE.TO: Quote, Profile, Research, Stock Buzz) is demanding that the Ontario Teachers’ Pension Fund pay a C$1.2 billion termination fee if the leveraged buyout of the company fails to go through, as expected, a newspaper reported on Saturday.
Citing people familiar with the situation, the Globe and Mail said BCE is pushing to get Teachers, the lead suitor in the C$34.8 billion ($28.3 billion) buyout deal, to pay the huge fee should the tangled, two-year-old bid for the owner of Bell Canada fall apart before a Dec. 11 deadline.
The deal, the world’s largest leveraged buyout, is on the brink of collapse after an opinion delivered by auditors that BCE would not pass a solvency test after taking on C$32 billion more in debt as part of the financing. A positive opinion on solvency is required for the deal to be completed.
According to the agreement, Teachers must pay the fee, thought to be the largest of its kind, only if the pension fund’s actions cause the deal to founder, the Globe reported. That would mean that BCE must prove that the fund gave the auditors, KPMG, incomplete or false information, according to legal experts, the Globe said.
Teachers strongly denies any wrongdoing but may decide to negotiate a settlement with BCE, sources told the Globe.
(Reporting by Frank McGurty, Editing by Sandra Maler)