On June 30, 2007, BCE announced that the company entered into a definitive agreement for BCE to be acquired pursuant to a plan of arrangement by an investor group led by Teachers Private Capital, the private investment arm of the Ontario Teachers' Pension Plan, Providence Equity Partners Inc. and Madison Dearborn Partners, LLC (the "investor group"). The all-cash transaction is valued at C$51.7 billion (US$48.5 billion), including C$16.9 billion (US$15.9 billion) of debt, preferred equity and minority interests. The arrangement was approved on September 21, 2007 at a Special Meeting of shareholders by more than 97% of the votes cast by holders of common and preferred shares, voting as a single class.

Under the terms of the arrangement, the investor group will acquire all of the common shares of BCE not already owned by Teachers' for C$42.75 cash per common share and all preferred shares at the prices set forth in the Preferred Share Schedule. The consideration to be paid for the common shares represents an approximate 40% premium over the average trading price of BCE common shares in the first quarter of 2007, prior to the possibility of a privatization transaction surfacing publicly.

Resources


Reply Factum of BCE Inc. and Bell Canada (PDF 3.82 MB) (redacted for confidential information filed under seal)

Factum of BCE Inc. and Bell Canada (PDF 1.09 MB) (redacted for confidential information filed under seal)

Response of BCE Inc. to the Contestations of its Motion for a Final Order (amended) (PDF 334 KB)

Webcast of the Special Shareholder Meeting held on September 21, 2007

Privatization of BCE – Shareholder FAQ  (PDF 63 KB)

Adjusted Cost Base (ACB) Estimator: online tool to help you calculate your ACB

Reminder notice for common and preferred shareholders to vote their shares (PDF 181 KB)

Notice of Special Shareholder Meeting and Management Proxy Circular (HTML 953 KB) | (PDF 827 KB)

Interim Order - August 10, 2007 (PDF 707 KB)

Motion for Interim and Final Orders (PDF 253 KB)

Definitive agreement (PDF 306 KB)

Material change report (PDF 152 KB)

Webcast of the media call held on June 30, 2007

Press releases:


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Frequently Asked Questions


General Information


When was the shareholder meeting held?

  • The special meeting of common shareholders and preferred shareholders of BCE was held in Montréal, Québec on Friday, September 21, 2007 at Centre Mont-Royal, 2200 Mansfield Street, in the auditorium Le Grand Salon.
  • The plan of arrangement involving BCE and the investor group was approved by more then 97% of the votes cast by holders of common and preferred shares, voting as a single class, greatly exceeding the required 66 2/3% approval.
  • An archive of the webcast of the shareholder meeting is available.

Who are the buyers?

  • The buying group is led by Ontario Teachers' Pension Plan. Teachers' is one of the largest pension plans in Canada with over $100 billion in managed assets and with significant experience investing in Canadian and foreign communications companies.
  • The other principal members of the buying group are:
    • Providence Equity Partners Inc. (Providence), a leading global private equity firm specializing in equity investments in the media, entertainment, education, communications, and information services industries. Providence currently manages approximately US$21 billion of capital and has made investments in three national phone or wireless companies: VoiceStream in the U.S., Eircom in Ireland and TDS A/S in Denmark.
    • Madison Dearborn Partners, LLC (MDP), one of the most experienced and successful private equity firms in the U.S. MDP focuses on investments across a broad range of sectors, including basic industries, communications, consumer, energy and power, financial services, real estate and health care. MDP manages more than US$14 billion of equity capital and has been an active investor in communications companies in North America, including NexTel, NexTel Partners, Clearnet and Metro PCS.

What approvals are required for the plan of arrangement to become effective?

  • We need:
    • Shareholder approval. The plan of arrangement was approved by more than two-thirds (97%) of all votes cast by common and preferred shareholders of BCE present at the Special Shareholder Meeting in person or by proxy, voting together as a single class;
    • Approval of the Québec Superior Court; and
    • Certain competition, CRTC, Industry Canada and other regulatory approvals in Canada and in the U.S.

What will be the level of Canadian ownership of BCE as a result of this transaction?

  • Immediately after the plan of arrangement is completed, not less than 58% of the equity ownership in BCE will be Canadian. The equity ownership of BCE would be as follows:
    • Teachers' - 52%
    • Providence - 32%
    • Madison - 9%.
    • Other Canadian investors - 7%
  • The level of Canadian ownership cannot change as a result of any syndication of equity.

When will the transaction be completed?

  • The plan of arrangement will be completed when all of the conditions of closing have been satisfied or waived.
  • We expect the transaction to close in the first quarter of 2008.

What happens to my units of Bell Aliant?

  • Your ownership of units of Bell Aliant is not affected by the Arrangement.

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Common Shareholders


What are the benefits of the transaction for common shareholders?

  • The Arrangement delivers substantial value creation for common shareholders. We believe that the transaction gives common shareholders the economic benefit of the work done to focus on our core business and to strengthen BCE with a new cost structure and new competitive capabilities, all of which are critically important in the modern world of telecommunications. The price of $42.75 per common share represents the highest value offered by any bidder who participated in the Auction Process and a premium of approximately 40.1% over the average closing price of our common shares for the three-month period ended March 28, 2007, being the last trading day prior to any public speculation about the possibility of taking BCE private.

Do I have to surrender my shares? When?

  • When the transaction is completed, all shares will be surrendered in accordance with the plan of arrangement.
  • We will send all registered shareholders a Letter of Transmittal explaining how and when you should deposit your shares and receive payment for them. We will do this once we are more certain when we expect the plan of arrangement to be completed.

My shares are in an account with a broker, will I have to do anything?

  • No. You will receive your payment through your broker who will adjust your account on your behalf.

Will BCE continue to pay dividends on its shares until the effective date of the plan of arrangement?

  • Yes. Subject to Board approval, we will continue to pay dividends until the effective date. Our agreement with the investor group allows us to pay a dividend of up to $0.365 per common share per quarter in accordance with customary record and payment dates.

What if I do not want to surrender my shares?

  • When the transaction is completed, shareholders do not have the option to keep their shares.

How will this transaction affect the Dividend Reinvestment Plan (DRP)?

  • Common shareholders will continue to participate in the DRP until the effective date of the plan of arrangement when it will be discontinued.
  • Any common shares that you have accumulated through the DRP will be treated the same as all other common shares. Computershare, as administrator of the DRP, will send a cheque to DRP participants once the plan of arrangement has become effective.

Will my shares in the Dividend Reinvestment Plan (DRP) or in the Employee Savings Plan (ESP) be subject to such a transaction?

  • Yes, shares in the DRP or ESP would be treated the same as any other common shares.

Will the shares continue to be listed on the TSX and the NYSE after the plan of arrangement is effective?

  • No. If the plan of arrangement is approved, all of the shares will be owned by the investor group, and we expect the shares to be delisted from the TSX and the NYSE immediately after the shares are acquired by them.

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Preferred Shareholders


What will I receive as a preferred shareholder in the arrangement?

  • Under the plan of arrangement, you will be entitled to receive the following per share amounts in cash for the preferred shares you own, together with all accrued but unpaid dividends on these preferred shares up until the effective date of the arrangement.
    Series of Preferred Shares Amount Per Share
    Series R $25.65
    Series S $25.50
    Series T $25.77
    Series Y $25.50
    Series Z $25.25
    Series AA $25.76
    Series AB $25.50
    Series AC $25.76
    Series AD $25.50
    Series AE $25.50
    Series AF $25.41
    Series AG $25.56
    Series AH $25.50
    Series AI $25.87
  • This consideration is equal to or greater than the redemption value for the preferred shares. The redemption price for all fixed rate dividend preferred shares (Series R, T, Z, AA, AC, AF, AG and AI) is $25.00 per share. The redemption price for all floating rate dividend preferred shares (Series S, Y, AB, AD, AE and AH) is $25.50 per share.
  • You will receive this cash consideration after the arrangement is completed.

Will BCE continue to pay dividends on its shares until the effective date of the plan of arrangement?

  • As per our agreement with the investor group, we are permitted to pay dividends on the preferred shares in the same amount and with the same frequency as provided for each series of preferred shares. Any accrued and unpaid preferred share dividends will be paid on the effective date of the transaction.

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Tax Consequences


What are the tax consequences of this transaction?

  • Generally speaking, receiving the cash consideration under the plan of arrangement in exchange for your shares will be a taxable transaction, giving rise to a capital gain (or loss) for Canadian tax purposes equal to the amount by which the purchase price exceeds (or is less than) the shareholder's adjusted cost base.
  • Canadian tax exempts, such as pension plans and RRSPs, will not be taxed.
  • See the Management Proxy Circular (PDF 827 KB) ("Certain Canadian Federal Income Tax Considerations") for more information about certain tax consequences of the arrangement.
  • Your tax consequences will depend on your particular situation. You should consult your own tax advisor so you have a full understanding of the tax consequences that apply to you as a result of the proposed transaction.

Are the tax consequences different for U.S. shareholders?

  • U.S. shareholders will likely not be taxed in Canada, but will also realize a gain (or loss) for U.S. tax purposes.
  • See the Management Proxy Circular (PDF 827 KB) ("Certain U.S. Federal Income Tax Considerations") for more information about certain tax consequences of the arrangement.
  • Your tax consequences will depend on your particular situation. You should consult your own tax advisor so you have a full understanding of the tax consequences that apply to you as a result of the proposed transaction.

How can I calculate the adjusted cost base (ACB) of my BCE shares?

  • A number of avenues exist to help you calculate your ACB, something you will not have to do until you file your tax return for the year in which you dispose of your shares.
    • If you use a broker, please consult them directly as they should have detailed records of your past share transactions.
    • For the Dividend Reinvestment Plan or Employee Savings Plan, we suggest you refer to the statements sent to you.
    • Historical BCE share price information is available in the Stock Information section of our website.
    • In addition, we have information on our website relating to historical events and corporate transactions that may have impacted your ACB. For a summary of these events and transactions, see Tax Information section of our website.
  • While you should consult your own tax advisor, we also can provide assistance to our Canadian resident shareholders in calculating the ACB of their shares.
    • An on-line tool is available on our website to help you estimate your ACB. This estimator is provided as a courtesy for illustrative purposes only and is not intended to represent legal or tax advice and shareholders are strongly encouraged to consult their professional advisors with respect to the tax consequences relating to the disposition of their BCE shares.
    • If additional assistance is required, call our toll-free number during
      office hours (1-888-222-7128).
  • Although our transfer agent, Computershare Trust Company of Canada, does not provide any service to help you calculate your ACB, if you are a registered shareholder or have been in the past, you can contact them for shareholder account inquiries such as confirming your original dates of purchase which will help you calculate your ACB. There may be a fee associated with some of these services.

Where can I find historical share prices to help me calculate any possible capital gains/losses?

  • We provide historical BCE share prices since 1983 as well as historical monthly average BCE share prices from 1949-1983 in the Stock Information section.

Where can I confirm my original dates of purchases?

  • If you are a registered shareholder, you can contact our transfer agent, Computershare Trust Company of Canada who will be able to help you in confirming your original dates of purchase.
  • If your account is with a broker, you can contact them for assistance.

What were the historical events that affected my cost base? What were the tax consequences?


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Bondholders


What will happen to the existing BCE and Bell debt?

  • The investor group has advised that all debt will remain outstanding except for the following 5 series of debt, which are currently expected to be redeemed according to their terms (Government of Canada bond yield + respective Canada Call spread) prior to maturity:
    • $650M BCE Series C notes maturing October 2009 (Cda call spread of 60 bps)
    • $150M Bell Mobility Series F notes maturing June 2008 (Cda call spread of 18 bps)
    • $700M Bell Canada M10 notes maturing January 2008 (Cda call spread of 25 bps)
    • $700M Bell Canada M2 notes maturing June 2009 (Cda call spread of 15 bps)
    • $600M Bell Canada M16 notes maturing August 2010 (Cda call spread of 18 bps)

Why isn't other debt of the company being redeemed?

  • The proposed transaction does not provide for the redemption of all of the indebtedness of the company. We can assure you that Bell will continue to comply with the terms of its debt instruments. Bell intends to respect the terms of the applicable trust indentures which govern the bonds.

Do bondholders also need to approve this purchase transaction?

  • The proposed capital structure respects the terms of the applicable trust indentures which govern the bonds. These indentures do not provide bondholders with voting rights, and as a result bondholders do not have voting rights under the plan of arrangement.

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