Shareholders approve $49bn BCE buyout

BCE shareholders have approved the Canadian telecom company’s sale to Teachers, Providence and Madison Dearborn. But the $49 billion transaction, the largest proposed buyout to date, still faces regulatory hurdles.

Shareholders of telecom giant Bell Canada Enterprises have approved its $49 billion (€35 billion) take-private by the Ontario Teachers Pension Plan, Providence Equity Partners and Madison Dearborn Partners.

Following a two-and-a-half hour special meeting Friday, roughly 63 percent of the holders of outstanding BCE common and preferred stock voted on the buyout, which was approved by 97 percent of the total votes cast.

The deal is the largest proposed LBO to date, the product of an auction which included two other heavy-hitting consortiums comprised of Canadian pensions and major US private equity firms. Cerberus Capital Management and Hospitals of Ontario Pension Plan led one group bidding for the $32 billion (€23 billion) BCE, while Kohlberg Kravis Roberts, Onex Corp. and pension giants Caisse de dépôt et placement du Québec and Canada Pension Plan Investment Board led the other, though Onex and la Caisse later pulled out of the bidding.

The shareholder-approved buyout still faces hurdles: Canada’s telecom regulatory body plans to hold hearings on the record-setting buyout in January, according to a report in the Globe and Mail.

Post-transaction, Teachers Private Capital, the pension’s private equity arm, will own 52 percent of BCE, while Providence will own 32 percent, Madison Dearborn will own 9 percent and other Canadian investors will own 7 percent. The consortium hopes to complete the deal in the first quarter of 2008.