NEW YORK – The American banks that have committed themselves to backing the $52 billion leveraged buyout of Bell Canada are seeking to renegotiate the deal, says a Monday story in the New York Times.
According to the story, the banks want new terms, including higher interest rates and stronger protections for the banks, as well as a lower purchase price, which is currently set at Cdn$42.75 per share. Shares closed at $38.80 on Friday and the Toronto Stock Exchange is closed today for the Victoria Day long weekend but BCE shares trading in New York were down over $2, or 6%, by mid-day Monday.
The buyers group includes The Ontario Teachers’ Pension Plan, Providence Equity Partners, Madison Dearborn Partners, Merrill Lynch and the Toronto Dominion Bank. All have insisted the deal will go through and regulatory approvals are complete. The new owners have said they want the deal finished by the end of the second quarter, June 30, 2008.
The Times piece says that the recently renegotiated deal to buy Clear Channel Communications in the States for a revised price may be used as a template to alter the terms of the Bell Canada deal by the group of banks that include Citigroup, Deutsche Bank and Royal Bank of Scotland.
The banks’ desire to amend the deal is thanks to the tightening global credit market.
