BCE Decisions Increase Commercial Certainty In Canada

The Quebec Superior Court recently released five related judgments approving the proposed privatization of BCE Inc. and dismissing various challenges by Bell Canada bondholders. The judgments provide a higher degree of commercial certainty than previously available for company directors, debt issuers and other capital market participants.

Background

In June 2007, BCE announced that it had entered into an agreement with an investor group led by Teachers' Private Capital, Providence Equity Partners Inc. and Madison Dearborn Partners Inc.¹ Under the agreement, the investors proposed to acquire all the outstanding shares of BCE at a price of C$42.75 per common share, a 40% premium for BCE's common shareholders. The parties agreed that the acquisition – the largest leveraged buyout in Canadian history – would proceed as a plan of arrangement under the Canada Business Corporations Act.