LAST WEEK’S ANNOUNCEMENT of BCE’s divestiture of all but 20% of its ownership holding in Bell Globemedia left one enormous burning question.
What is the company going to do with the $1.3 billion in proceeds from its sale of control of one of Canada’s largest media companies? BCE CEO Michael Sabia told an analyst conference call last week that the company won’t be announcing what it plans to do with the money until February.
Here, in no particular order, is the www.cartt.ca Top 10 List of things BCE could do with its new pile of money, when it receives it in 2006 (assuming CRTC approval of the proposed ownership changes, that is).
10a. Distribution to shareholders (it works out to about $1.40 per share).
10b. Distribution to employees (which works out to about $20,000 per. A whoop of “We’re goin’ to Disneyworld!!” would be heard across the land).
9. International investments (Probably not. Teleglobe is too recent an international owie – which is still litigating – and $1.3 billion Canadian simply doesn’t buy all that much in the international market).
8. Purchase MTS (distressed Manitoba company may be a target – for both Bell and Telus).
7. Purchase the 48% of Aliant it doesn’t own.
6. To help purchase Telus (Some large regulatory hurdles here make this unlikely – that and Telus’ $8 billion-plus price tag).
5. To help purchase Shaw (the western cableco would be worth close to $6 billion).
4. To be coy and pretend like BCE’s going to purchase Shaw so that Rogers Communications pays a fuller premium for the Calgary-based MSO (a deal which would face its own, many, regulatory hurdles).
3. Pay debt. (BCE would do this at their own peril, if analysts are to be believed. “I sure hope you can articulate as to why this is a good deal,” said TD Newcrest’s Vince Valentini, on the conference call, alluding to Sabia’s February time frame, because keeping it on the books or paying down debt, “would be dilutive.”)
2. Buy Videotron (er, no.)
1. Pay for expensive IPTV deployment in Southern Ontario and Quebec (Hmmm… Hundreds of millions is already being spent to upgrade the Bell wireline network in order to roll out digital television on its phone lines beginning in 2006. To continue to upgrade – and then deploy such a product – across such a huge, populous region, is going to cost jillions more, especially if Bell wants to bring fibre as close to the home as possible).
