MONTREAL – BCE Inc. on Wednesday said it and its proposed buyer – a consortium led by the Ontario Teachers Pension Plan – will seek leave to appeal to the Supreme Court the Quebec Court of Appeal’s decision to deny the $52-billion leveraged buyout.
Some disgruntled Bell bondholders are attempting to block the deal that they say loads BCE up with debt and makes their bonds a riskier investment.
“BCE never attempted to justify the fairness and reasonableness of an arrangement that results in a significant adverse economic impact on the debentureholders while at that same time it accords a substantial premium to the shareholders,” the Quebec Appeal Court ruled.
Earlier, Quebec Superior Court Justice Joel Silcoff made five rulings that sided with Bell, and led to the bondholders appealing.
Now, it’s Bell’s turn to appeal; the telecom giant is seeking leave to appeal to the highest court.
“The judgment overturning the Quebec Superior Court decision rewrites Canadian law relating to the duty of Canadian boards of directors to maximize value for shareholders in the context of a change of control transaction, as well as to the entitlements of bondholders in those circumstances,” said Martine Turcotte, chief legal officer of BCE and Bell Canada. “Both the transaction and the issues of law involved are of public importance in Canada. We believe the Supreme Court of Canada should reverse this decision, and allow the transaction to proceed.”
The appeal will require the Supreme Court of Canada to grant leave to appeal. BCE stated it would be seeking to expedite the disposition of the application for leave to appeal, and any appeal.
In light of today’s Quebec Court of Appeal decision, the expected timing for the closing of the buyout will be contingent on the Supreme Court granting leave to appeal and the timing related to any such appeal, BCE noted in a media release.
