BCE Announces $51.7B Acquisition By Group Headed By Ont. Teachers Pension Plan

MONTREAL (CP) – BCE Inc. said Saturday it has reached an agreement to be bought by a group led by the Ontario Teachers Pension Plan for $51.7 billion, making it the largest takeover in Canadian history.

Teachers Private Capital, the investment arm of the pension plan – along with U.S.-based Providence Equity Partners and Madison Dearborn Partners LLC – won out over several other bidders.

Montreal-based BCE (TSX:BCE) had other potential bidders, including New York-based Cerberus Capital Management LP and the Canada Pension Plan Investment Board.

Telus – Canada’s second-largest telecom company – pulled out of the bidding last Tuesday.

The Teachers Pension Plan was already BCE’s largest shareholder with a 6.8 per cent stake.

Under the deal, which BCE’s board of governors is recommending unanimously to shareholders, the equity ownership would be as follows: Teachers Private Capital 52 per cent, Providence 32 per cent, Madison Dearborn nine per cent and other Canadian investors seven per cent.

The Ontario teachers pension group – with assets of $106 billion in 2006 – invests and administers the retirement funds for Ontario’s 167,000 teachers and 104,000 retired teachers.

BCE, which has more than 54,000 employees, had annual revenue of $17.7 billion in 2006. It has 18.2 million customer connections, including 5.8 million wireless subscribers, 8.64 million phone lines, 1.94 million internet subscribers and 1.82 million satellite television subscribers.

Other BCE holdings include interests in CTVglobemedia, one of the Canada’s biggest media companies.

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Here are the key players in the $51.7 billion proposed deal for the sale of BCE to a group of investors led by the private investment arm of the Ontario Teachers Pension Plan:

BCE Inc.

Canada’s largest communications company serving residential and business customers under the Bell name. It provides local, long distance and wireless phone services; high-speed and wireless Internet access; IP-broadband services; direct-to-home satellite and VDSL television services, among others. Other BCE holdings include Telesat Canada, which operates satellite communications, and an interest in CTVglobemedia, the media company that owns CTV and the Globe and Mail newspaper.

Ontario Teachers’ Pension Plan

The $106 billion Ontario Teachers’ Pension Plan is the largest single-profession pension plan in Canada. It is an independent corporation responsible for investing the funds and administering the pensions of Ontario’s 271,000 active and retired teachers. Its private investment arm is Teachers’ Private Capital, with more than $16 billion in assets. It invests in large and mid-sized companies, venture capital for developing industries, and financing for infrastructure and timberland assets worldwide.

Providence Equity Partners Inc.

A major private equity firm specializing in investments in media, entertainment, communications and information companies. The principals of Providence manage funds with approximately $21 billion in equity commitments and have invested in more than 100 companies operating in over 20 countries since the firm’s inception in 1989. Providence is headquartered in Providence, R.I., and has offices in New York, London, Hong Kong and New Delhi.

Madison Dearborn Partners

A private equity investment firm based in Chicago, it has more than US$14 billion of equity capital under management. The company has interests in a broad spectrum of industries including communications, consumer, energy and power, financial services, health care and real estate. Its communications sector investments include wireless providers such as Nextel Communications and Clearnet Communications. It has also invested in the media industry.