Telus CFO: No Plans To Merge with BCE

TORONTO (Reuters) – Telus Corp (T.TO: Quote, Profile, Research, Stock Buzz), Canada’s No. 2 phone company, is not pursuing a merger with bigger rival BCE Inc (BCE.TO: Quote, Profile, Research, Stock Buzz), Telus’s chief financial officer said on Tuesday.

“We’re just focused on executing our business plan,” Robert McFarlane told Reuters in an interview. “We’re not working on an acquisition of BCE.” His comments come less than a week after a C$34.8 billion ($28.5 billion) buyout of BCE by a group of private-equity investors ended in collapse.

They also pour cold water on investor hopes that Telus could emerge as a strategic buyer for BCE after the Montreal-based telecom giant was left without a suitor.

Telus had planned to make an offer for BCE in 2007, but walked away before BCE made a deal to be taken over by a private-equity group led by the Ontario Teachers Pension Plan.

The BCE deal was supposed to close on Dec. 11, but BCE’s accountants, KPMG, ruled that the post-buyout company would fail a solvency test because of its huge debt load. A positive solvency opinion from KPMG was a condition for the deal’s closing.

With the buyout dead, analysts and investors have said Telus could reemerge as a potential purchaser. However, some also said such a deal would meet with stiff regulatory scrutiny, since it would combine two of the country’s top three telecom companies.

BCE shares were down 33 Canadian cents at C$21.13 on the Toronto Stock Exchange on Tuesday afternoon. Telus, which also released its 2009 outlook on Tuesday, fell 78 Canadian cents to C$33.35.

($1=$1.22 Canadian) (Reporting by Wojtek Dabrowski; editing by Peter Galloway)