MONTREAL and HALIFAX – BCE is buying the stake in Bell Aliant that it doesn’t already own and will take the regional telco private, the company announced Wednesday.
The deal, valued at approximately $3.95 billion, has already been recommended by independent Bell Aliant directors. BCE already controls Bell Aliant and is acquiring the remaining approximately 127.5 million common shares that are owned by the public minority shareholders.
Bringing Bell Aliant wholly into BCE simplifies the company's structure, eliminates redundant public company costs and will increase overall operational efficiency, the company said. BCE expects annual run-rate free cash flow accretion after common dividends of approximately $200 million a year. In addition, with the elimination of Bell Aliant public company expenses and other duplicative costs, BCE expects to generate approximately $100 million in pre-tax annual synergies.
"Bell Aliant is a core part of BCE's national communications operations alongside Bell Canada. Privatizing Bell Aliant enhances our broadband investment strategy and capital markets objectives while delivering great value to the public minority shareholders who have supported Bell Aliant's success," said George Cope, president and CEO of BCE Inc. and Bell Canada, in a statement. "In line with our investment-focused strategic imperatives, BCE looks forward to continuing network and service innovation to benefit consumers and business customers across Bell Aliant's territory."
Bell Aliant will continue to serve customers in New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island from its Halifax headquarters, the statement continued.
“As a result of the privatization, Bell Aliant will be able to combine its product and service strength, and cost management skills, with the world class communications networks and operations of Bell Canada, delivering even more value to our customers”, added Bell Aliant president and CEO Karen Sheriff. “Furthermore, Bell Aliant's heritage of delivering value to its customers through technological innovation and strong local presence will be further strengthened by the full backing of BCE. This support will ensure that Bell Aliant maintains its leadership position as the leading customer-focused communications service provider in the markets we serve."
The privatization transaction is expected to be completed by November 30, 2014, subject to more than 50% of Bell Aliant common shares held by public minority shareholders being tendered to the offer, notification under the Competition Act, and other conditions. The deal does not require approval from the CRTC and Industry Canada because there is no change in control of Bell Aliant, and no transfers of wireless spectrum licences.
