Telus Decides Against Takeover Bid for BCE; Three Suitors Remain

Telus said it has elected not to submit an offer to acquire BCE, citing "inadequacies of BCE's bid process." Canadian buyout fund Onex Corp. and a Quebec pension fund also withdrew plans to bid, pushing shares of BCE down 3.1% to $36.86 on Tuesday, while Telus rose 0.8% to $57.64. The three remaining interested parties believed to have made bids Tuesday include: [1.] Ontario Teachers' Pension Plan (BCE's largest shareholder at 6.3%) partnering with Providence Equity Partners, [2.] Hospitals of Ontario Pension Plan with Cerberus Capital and [3.] the Canadian Pension Plan Investment Board with KKR. The Wall Street Journal reports Canadian investment bank Catalyst Asset Management proposed a restructuring plan Monday, which would keep BCE as a standalone company, with possible upside for its shares of 12% to 37% above its Monday close of $38. BCE's shares are up almost 30% since buyout speculation began in late March. Some analysts believe the bidding period could be extended as some interested parties felt rushed by BCE. There's also concern over foreign ownership restrictions of telecom firms. A Credit Suisse analyst told clients, "Telus can wait to be invited back, or may even launch a hostile takeover of its own."

Sources: Press release, Bloomberg, The Globe and Mail, Wall Street Journal
Commentary: Why Isn't Telus Bidding for BCE? • Three Way Bid for BCE Underway • Telus Not Interested In BCE, Shares Rise
Stocks/ETFs to watch: BCE Inc. (BCE), TELUS Corporation (TU)

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