Telus And BCE Confirm Merger Talks
Published on: 21st Jun 2007
Note -- this news article is more than a year old.
TORONTO AP Telus and BCE Canada s two main telephone companies said they are in merger talks as Telus joined a growing list of companies eyeing BCE which confirmed earlier this year it was reviewing options to increase shareholder value
BCE said late Wednesday it is in discussions with Canada's No. 2 telephone company to "explore the possibility of a business combination."
The two companies - which together have a combined market capitalization of more than C$50 billion ($46 billion) - have entered into a non-exclusive agreement, BCE said in a statement late Wednesday.
A merger would likely raise concerns of market dominance.
Federal Industry Minister Maxime Bernier acknowledged last week the government is aware of the fierce debate around whether Canada's mobile market lacks competition as industry players exchanged barbs over whether the country's main mobile companies - BCE, Telus and Rogers Communications Inc. (RCI) - have already become too dominant.
Recent media reports, quoting sources close to the company, said Telus was unlikely to join the bidding unless it has a clear signal from Ottawa that it would not block a merger of the country's two largest telecommunications companies.
Other suitors include groups led by the Canada Pension Plan Investment Board, Ontario Teachers Pension Plan Board, and U.S. private equity firm Cerberus Capital Management LP.
BCE has reportedly asked the three consortiums to submit their offers for the company before July 1.
While private-equity bids have dominated takeover speculation so far, BCE CEO Michael Sabia said at the company's recent annual meeting that a private equity takeover is not the only option available to the company. That has led Bay Street to speculate on other possibilities such as a massive share buyback or a merger with Telus.
(END) Dow Jones Newswires"