MONTREAL – The third quarter of 2007 (July-September) has been set as the deadline for a decision by the board of directors of Bell Canada Enterprises on its strategic review.
Given the much-talked about potential for a sale of the company to private equity, the company officially embarked on a strategic review eight days ago to flesh out potential buyers and study possible actions which may or may not include a sale. However, at this point, most observers expect a sale, with the only question being to who.
Today (Sunday) BCE announced that its board has set the third quarter of this year to complete that review "of a range of strategic alternatives based upon the recommendation of the strategic oversight committee established on April 20, 2007," says the press release.
The strategic oversight committee reports to the full board and is composed of independent directors André Bérard, Thomas C. O’Neill, James A. Pattison and chair Donna Soble Kaufman.
One option under consideration by the board is the privatization of the company, says the press release. In that context, Donna Soble Kaufman commented in that statement by taking a swing at Canada’s foreign ownership restrictions, saying: "The actions taken by the board, management and advisors have been consistent with the goal of creating an open process to surface the highest value available through the privatization option. In doing so, we recognize the challenge presented by the fact that the Government of Canada’s foreign ownership rules will limit the role that large non-Canadian sources of equity can play in enabling this competition.
"For that reason, our goal from the beginning has been to foster a competitive process by seeking to ensure that no one party is able to assemble a disproportionate share of available Canadian equity. In all their actions, the board, management and advisors have followed this principle."
Reports in many places have suggested for a while now that certain large pension fund players are pooling their resources all together instead of bidding against one another. Such a process would, of course, drive down the sale price of BCE.
"The board and the strategic oversight committee are committed to conducting a process that all qualified parties can participate in," added the release. "The board also indicated that all parties wishing to qualify to participate in the privatization process must be able to establish adequate financial capacity for a transaction of this size and complexity."
BCE will open an electronic data room this week that will be available to any qualified bidder. Potential bidders would also be required to sign standard confidentiality and standstill agreements for transactions of this type.
Concurrently, the strategic oversight committee will continue to consider strategic alternatives other than privatization.
