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U.S. equity firm stalks BCE, plots takeover

ERIC REGULY AND ANDREW WILLIS

From Thursday's Globe and Mail

Latest comment posted at 6:29 AM EDT 29/03/07

Shares rise 7% in early trading on the TSX; deal worth at least $24-billion would be the largest in Canadian corporate history; Kohlberg Kravis Roberts in talks with pension and private-equity funds to overcome regulatory restrictions ...Read the full article

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  1. Mr Fijne from Calgary, Canada writes: Sabia must Love Harper/Flaherty: what a juicy deal in perspective that these trust unitholders would have killed... Politics=Media=Harper=BCE=Distrust
  2. Al Koholic from Montreal, Canada writes:

    This calls for another bottle!

    Canada is a great place to invest in. If you don't like this deal, short the stock. If you like it, buy the stock.

    Otherwise your opinion is just a liberal/ndp hate blog.

    Thanks!

    .
  3. Mr Fijne from Calgary, Canada writes: Al colique: Thomspson body is barely lukewarm the family sells out to a US private fund! What a moral fiber, what a patriotism, what independence from the Gleube and mail... lol Canadian values, mon cul!
  4. Mr Fijne from Calgary, Canada writes: Now That explains the change of heart of the globe politicos editos. When Harper started governing, the globe riled him with 'Mr Harper goes to whashington' headlines... then Harper became suddenly acceptable over the summer; more, Flaherty's attack on trusts was overdue and good for Canada etc... Of course it was good for BCE's Canada who needed a favorable situation to make their big friendly deal!
    BCEs support was negotiated with teh trust attack. Sabias announcement that they were trusting was the signal or the blackmail...
  5. Frank Black from Syrian Arab Republic writes: I'm getting tired of everything Canadian being bought by a small portion of America. Corporately, it seems all things Canadian is eventually bought by the Americans - BCE, Tim Horton's, Future Shop... what's left? Canadian Tire and Rona? Politically - with Harper in power and according to the G&M and Star, gaining steam - let's just cut to the chase and replace the Maple Leaf with a Star or two.

    What exactly is the Canadian identity? What does it mean for Canada to be a sovereign nation? So many policies are heavily influenced or controlled by the States. Our economy and business strengths are slowly being absorbed by the U.S. Some citizens in Canada show more support for Bush than the hated Liberals.... I can't imagine an American doing a similar act. Honestly - what does it mean to be a Canadian? Is it any different from being a Californian? A certain amount of leeway, but at the end of the day, Washington controls all?
  6. robert harris from Canada writes: What drives me crazy is how undervalued everything Canadian is. Why is it the rest of the world recognizes Canadian businesses as dirt cheap to buy. Are we being sold out by our corporate elites? Are Canadians too risk-averse to buy into Canadian companies? Not to mention this whole private equity thing. These people are going to own the whole country one day and Canadians are going to wake up one morning and realize they have a big problem.
  7. andrei de souza from Toronto, Canada writes: KKR were referred to as Barbarians At the Gate for a reason. They add no value to a corporation or to corporate Canada in this instance. They buy assets with other people's money, strain money out of these firms to line their pockets, then sell them back to investors. How does this build strong world beaters? It doesn't. It's destructive in every sense.

    It is the right wing that should be most up in arms, not the NDP. KKR are not business men, they cunning theives who skirt the law.
  8. Bob Fox from Calgary, Canada writes: That's the risk of raising capital on US capital markets. Some Canadians are so hypocritical, they want access to raise money but cry when someone they don't like buys the shares.

    Who cares who owns the company? It's none of my business. As long as the phone or the TV works I'm happy.
  9. one thinker from Canada writes: The price of u.snization... i mean globalization ?
  10. joseph Cheng from Toronto, Canada writes: I wonder how PM Harper and his cronies will react if China puts in a competing higher bid to acquire BCE. Failing that, what would happen if China puts in a bid to buy Telus or CN or CP. Since we welcome foreign ownership of our business enterprises, why not just sell the whole country for a couple of trillions. I bet China and the U.S. will be most anxious to put in a bid. Long live Canada of the United States of America or of the Peoples' Republic of China!
  11. Frank Black from Syrian Arab Republic writes: Yes Bob Clarke. Unfortunately - and I mean no disrespect to you personally - that's the problem with some Canadians. Some of us take little pride in our country. Especially when it has to do to with the U.S.

    Would you mind if the ownership was Islamists who commit international atrocities? I ask because I wonder if there are any limits to your not caring on who owns the company - not to start a debate about the Middle East and such.
  12. J Birch from Hamilton, Canada writes: Well if one re reads the article I suggest that what they will really be doing is turning BCE into a private Income Trust. Of course it won't be call that, but look how they are going to milk it, just like the 'so called deficiency' in the Business Trust Model and Flaherty's alleged case against them. What has happend is that the democratization of investment by addopting the Trust model has been stopped so that parties can take them private as Corps and then effectivly make them function like Trusts. And Teachers Fund, teachers being mostly NDP, shall live off the proceeds of this private 'Trust'while the great unwashed investors get shafted. The NDP are such hypocrites, seeing as they helped screw the avaerage public Income Trust Investor. And Flaherty - what a putz, calling him a lapdog would be a disservice to cannines everywhere.
  13. Peter Cox from In Ireland right now, Canada writes: Interesting to read another article in this edition where the REIT industry association are bemoaning the fact that there is a 25% limit on how much foreign investment is allowed in REITs. Bell Canada is a publicly traded company and as such can be bought by whomever has the money to do so. Frank Black, after living in Canada for over 35 years, I now realize that there is no such thing as 'Canadian Identity'. We collectively describe ourselves as 'not being American' and unfortunately that negative statement is about as close as we come to a national identity.
  14. Pierce Nettling from United States writes: The Americanization of Canada continues. Wake up people, look what's happening to your country, you're being taken over. unbelievable.
  15. 20 20 from Canada writes: This is wrong in my opinion. Communications is the basic nervous system of a sovereign country, and should not be allowed to fall under foreign control.

    If we have 'federal laws that prevent foreigners from owning more than 46 per cent of the voting shares of a telecom company', shouldn't attempts to circumvent the laws be illegal?

    Perhaps this will help Harper ahead of an election, a chance to show that he 'stands up for Canada'? I expect the NDP to speak out against this, and since we're in election-soon mode the Liberals will likely want to as well. I hope the Ontario Teachers' Pension Plan, Ontario teachers, and Canadians of all stripes take a stand against this.

    'Certainly, no one thinks anyone could buy BCE without Teachers getting involved,' the executive said.

    The Ontario Teachers' Pension Plan can be emailed at communications@otpp.com or called toll-free at 1-877-812-7989
    (http://www.otpp.com/web/website.nsf/web/howtocontactus)
  16. Philip Van Bergen from Hashima, Japan writes: Peter Cox writes that there is 'no such thing as 'Canadian Identity'.
    What a load of BS! If there is no such thing as a Canadian Identity
    then there is no such thing as a New Zealand identity (being the
    'same' as Australia). Or Malaysia, since they speak the same language as Indonesia, or Ireland, because they are just like Britain.
    Or Austria and Switerland. They are just copies of Germany
    without the proper German accent.
    I suppose we are just copies of the US without the proper NY/Southern/MidWest etc... accent. A lot of African countries would
    be classed as similar to their neighbours. Heck, all the Arabian
    countries must be the same. What's the difference between Iraq
    and Jordan? Or Syria? A lot of Iraqis seems to be fitting in nicely
    in Amman these days. They must all be the same!

    I don't subscribe to your view. Canada is a fine country, with hockey,
    curling, cottages (cabins) and canoeing at the core of its culture.
    Canadians are fair and reasonable, and are very respected in
    this world. Personally, I don't compare myself to Americans. They
    have a great country with their own unique traditions and culture.
    But Canada is one of the few countries where people can move
    from Halifax to Vancouver and no one would know because
    people talk the same. Try that in any other country!
    Very egalitarian!

    As for the overtaking of Canada's corporate world, few other
    countries would allow it on the scale that Canada does. Japan
    would freak out if Toyota were sold to some foreign company.
  17. Dr. Winston O'Boogie from Liverpool, Canada writes: Is Bell the phone company / phone & data network / network carrier for the Canadian government & government offices? Could this be a matter of National Security? Imagine if AT&T had phones in the White House & the Pentagon, and a foreign company tried to ‘own’ AT&T….
  18. Vern McPherson from Toronto, Canada writes: Will the new BCE be subjext to US law when it comes to monitoring citizens' telephone conversations ? How about the research work ? Are Canadian citizens from certain other countries to be excluded from certain projects while KKR robs the company of it's cash and sells off its' units to whomever ? KKR is a leech.
  19. Stude Ham from Outremont, Canada writes: This is an outrageous business proposal on many fronts. First, Bell would be bought out by a foreign corporate entity that does not have the money to buy the outstanding shares in BCE. Notice... they would 'leverage'. That means that the intent of the buyer is to flip the whole organization to some dark horse third party as yet unspecified. Flakey and Harp must act swiftly to stop this foreign grab of our telecommunications giant. They certainly stopped it from converting into a trust. They can do this and must do it.
  20. Brian Trotter from Barrie, Canada writes: Geez - the world won't slow down. We're stil waiting to see who's buying our A Channel - what with the CTV globemedia / Chum bond.

    Oh well - won't it be fun when directory assistance comes on with a Bronx accent?
  21. Michel Frechette from Kapuskasing, writes: Once this deal is done its cost will be passed along to the consumer. Watch for a debt retirement change to appear on your monthly invoice. Big business has become big government since most of us work to consume but not everyone votes.
  22. Dan Weagle from Halifax, Canada writes: Yes, KKR (and most other private equity firms) are leeches...but how much better are those idiots running BCE? Leadership, strategic vision, any realistic plans? Simply look at the stock price to know that no one is convinced current management has any clue how to run this business, let alone grow it.

    Current investors are going to profit handsomely from the run-up the stock will get today and if takeover talks continue; and we're all shareholders in BCE one way or another, so quit your whining.

    That said, no way does the Government allow this to go through...pity.

    As to the meatball in Japan who thinks there's a distinct Canadian identity that involves canoes, cabins and curling...what type of hallucinogens are you on over there. I daresay many more Canadians are anti-American (and proudly so) than have ever thrown from the hack.
  23. Robert Pike from Kitchener, Canada writes: Is it a hostile takeover? I can't see anything stamped as American being otherwise. I wish some of our big Canadian companies would stay Canadian.
  24. Globe Insider subscriber content
    Les Caine from brampton, Canada writes: Is there anything left that we would not offer up?
  25. Thomas Price from Whitefish, Canada writes: At the same time, Venezuela is nationalizing their communications systems out of US ownership. When one door closes, another opens. When one country raises itself from third world status another lowers itself to keep the balance. Going down anyone?
  26. Philip Van Bergen from Hashima, Japan writes: Dan Weagle writes: As to the meatball in Japan who thinks there's a distinct Canadian identity that involves canoes, cabins and curling...what type of hallucinogens are you on over there. I daresay many more Canadians are anti-American (and proudly so) than have ever thrown from the hack.

    Sorry mate, can't say that there are any hallucinogens in Japan.
    They don't allow drugs here in Asia.

    I haven't the foggiest idea of what a 'hack' is. Maybe you'll have
    to enlighten us.

    I stand by my comments. Canada has a great culture, and
    Canadians enjoy many things about it. The fact that you mock
    such common aspects, such as hockey and cabins kind of shows
    how lost you seem to be.
    If I told you what Japanese people are proud about their culture
    you would be even more surprised. But then again perhaps the
    word 'culture' is too difficult to understand.
    As for the anti-American sentiment in Canada- who cares?
    It's their loss, not yours or mine. Anyone who has been to the
    States enjoys the differences and similarities to Canada.
    I personally think San Francisco (and a lot of California) rank
    among the top 10 places to visit in the world.
    But that's just me.

    But I still don't like the fact that every company in Canada seems
    to be taken over by some European, American or Brazilian company
    these days. It's not healthy for Canada.
  27. Globe Insider subscriber content
    Crazy Canuck from Canada writes: All of the profitable Canadian companies are getting snatched up by foreign investors. Within 10-15 years there will not be any blue chip Canadian companies left which will leave Canadians with no choice but to invest their retirement savings outside the country. This will make it even more difficult to save for retirement because the tax rates on foreign investments are punative (because of double taxation).

    It is incredibly naive to believe that the short term gains from selling BCE shares today can offset the loss of a blue chip company with a steady dividend stream taxed at favourable rates.

    I really hope this takeover is never allowed to happen. I find it sick that the Teacher's Pension fund is even entertaining the idea.
  28. Globe Insider subscriber content
    M. R. from Toronto, Canada writes: J. Birch gets it! This is what it was all about, Sabia wanted his own deal and exclude shareholders/unitholders.

    Doesn't anyone here wonder why Sabia begged Harper/Flaherty to stop Bell from converting to a trust???
  29. Freddy Sanon from Ottawa, Canada writes: Peter Cox in Ireland right now, you are incorrect: publicly traded companies are NOT free to be bought by all and sundry. Companies in the communications and financial services sectors in Canada have caps on the limit of foreign investment that precludes non-Canadian individuals/firms from becoming majority owners. It's in the article.
  30. D B from Canada writes: Utilities should be under public control. Nationalize them.
  31. Globe Insider subscriber content
    mr motoc from Canada writes: A big US company finds some Canadian stooges to act at its behest, in order to facilitate an evasion of the intent of the law: to avoid control of a Canadian company by non-Canadians. All in the name of 'becoming international' or 'waking up to the realities of the world today' or some other . . . excuse and rationalisation.

    NO PROBLEM.

    AS USUAL.

    And the money and assets from the 'new' company will -- after a 'suitable interval' -- Go South.

    NO PROBLEM.

    AS USUAL.
  32. Peter Folkes from Canada, writes: BCE slashes pensioners benefits. The Feds slash Income Trusts slashing Seniors incomes. INCO gone to foreign owners. Now BCE going going Gone.

    Taxes went up, hydro, telecom costs, insurance up, gasoline up, surtax on minivans. Get ready Canada.

    The next 25 years are going to be dreadful for all Canadians excepting the wealthiest 10%. The rest of us best get ready to hunker down.
  33. fed up from Canada writes: This is sick, America piss off allready. Anything else you people want from us, it never seems to end. Buy bell and you can come to my place grab your dish and stick it you know where. When is this selling off our country to the yanks going to stop. I'll tell you when. When we have nothing left.
  34. Peter Folkes from Canada, writes: BTW

    Now BCE pays ZERO corporate tax.

    It wasn't planning on paying any for the next 4 years.

    If this take over goes ahead as planned between a private Equity Firm and Teachers Pension fund the government will NEVER see any tax revenue.

    Nice move Flaherty if it had converted to a Trust you would have had millions of extra Income tax revenue to bribe voters in Quebec starting this year.

    Instead Canada can look forward to a big fat ZERO.
  35. domenico costanzo from TORONTO, Canada writes: Mr. Flaherty has always said that income trusts cause tax leakage for the Government,now that BCE IS FOR SALE,they get 0 revenue.What a fiasco!!!!
  36. Paul Malouf from Montreal, Canada writes: some thoughts: 1) SELL OUT, Canadian ECONOMIC TREASON 2) Will the White House , AG Gonzales, NSA, & FBI WIRETAP our Canadian telephone conversations & email??? POLITICAL TREASON 3) If Harper federal government does not protect Canadian business SOVERIEGNTY, then that is a crime - treason! 4) If this deal goes through I CANCEL all my BCE telephone, mobility, sympatico & expressvue accounts within 24 hrs.
  37. Henriette Heroux from Herouxville, Canada writes: Nationalism, ROC style... Nothing to do with the poet's: 'There is indeed, on the Volga, a rock... ('Yiest na Volgie ewtios').
  38. uncle wrinkly from Toronto, Canada writes: Could all the anti-americans and crackpot conspiracy theorists take their opinions back to the 'national' section and leave the 'business and investing' stories to the people who actually have a clue about business and investing.

    1) Given that BCE is trading at a huge discount to its NAV and this move would unlock that value and create wealth for the MILLIONS of Canadians who either directly or indirectly have exposure to the company, it would be great for the country.

    2) The operations of BCE subsidiaries will still be heavily governed by Canadian regulators regardless of who owns the company so there are no gorunds whatsoever to assume that service will be any worse than under the current ownership structure.

    3) Ont Teachers not to mention CDPQ, OMERS and every other major pension fund in this country have been making private euity investments in US companies for decades, is that evidence of a secret conspiracy to take over the US?...No...they are simply doing whats best for the future of their plan members.

    If you own BCE and dont like this, sell your stock. If you are a customer of theirs and you dont like this, swtich to Rogers or Telus. Otherwise, go put a sock in it.
  39. David Simon from Canada writes: 1/ Its interesting to read the comments of people who love and care for Canada so much they don't want to live here.

    2/ Why criticize Americans for buying Canada and not criticize Canadians who sell Canada? One can't happen without the other.

    3/ BCE has been underperforming for at least a decade. If someone can come in and do the job better, that's great (see HBC)
  40. Dog's Best Friend from Canada writes: With each acquisition we move closer to joining Fortress North America by becoming the largest U.S. state. Once all of the big companies are gone, the Canadian government will then be lobbied to relinquish the ownership laws and eventually all of the large firms will be under American or other International ownership. We'll be tenants in our own land. Afterall there is no provision for private ownership of property under the constitution so what possible argument could we offer that would stop the eventual buyout of Canada in its totality. Of course this is just conjecture.
  41. Phil Spector's Hair from Not there, Canada writes: Brian Trotter from Barrie, Canada writes:
    Oh well - won't it be fun when directory assistance comes on with a Bronx accent?

    Brian, that won't happen - they've already outsourced their call centres to India.
  42. uncle wrinkly from Toronto, Canada writes: M.R. : let me see if I understand you? As a BCE stcokholder I owned an asset that was worth about $30 yesterday. This announcement could lead to that asset being worth $35 or more. And you say that's bad for me? Ohhhhhkay then. I need an FA?? You need a grade two math lesson. And a 'private' trust vs a 'public' trusts pays no taxes...can you direct me to the section in Canadian tax law that backs up that ridiculous analysis.

    Buck Canuck: of course its about money. The vast majority of people prefer more money rather than less money. Do you not understand this? If you genuinely don't then I suggest marching into Starbucks this morning and demanding a pay cut before you pour my coffee.

    Regards
  43. Bat Man from T.O., Canada writes: What a bunch of chicken littles!

    What's really funny is that if this article was on the service that Bell provides it would be full of various comments about how much Bell stinks. But no we can't sell it. They have Beavers selling hteir wares!

    Exactely how does Bell make you feel more Canadian? Are you that pathetic that a large faceless organization powers your patriotism?

    If you don't like it, don't deal with them. There are other options, Rogers, Telus, Primus (oops not them their American).

    In addtion the article states that there would have to be a huge Canadian part to this deal.

    Further why are people saying there'd be no taxes paid? A company that does business here, pays taxes here.

    I assume that many of the posters here also complain about Canadian manufacturing jobs being lost and then don't understand that by shopping at WalMart they are the cause.

    And this may have been said before, But Canadian companies are constantly buying firms outside our borders.

    I would also like ot point out that Shopper's Drug Mart is a far, far better store now then it was before it went private equity and then went public.

  44. Richard Soley from Cochrane, writes: Flash back to halloween, 'Trusts are not good for Canadian' well here we are in the present and this deal is not going to go away and it is not alone. Several smaller resource company trusts are in the works to be bought out and the asset's then belong to non canadian entities. If we keep overtaxing the investors in Canada they will go elsewhere, money talks with it's feet. So in case anyone is going to cry 'the government should do something' remember the government did. Another example of Polticans are popular not smart. Harper is fast using up all western credit he had.
  45. Timber 'n from Somewhere, Canada writes: Silly. Canadians pay more than they should for telecom. High regulation and a small market are reasons. Expansion and connections with the US serve to bring that down. As for those of you that feel you must bash the US constantly to feel better, please, you sound like my two boys. I'm faster, I'm taller, his feet stink.....it's kind of funny when its little kids, not so much when its whiny adults. Grow up.

    More integration with US networks will bring costs down, and that is in the interest of Canadians. Telecom is not a sacred cow, BCE doesn't export anything, they are not innovative, and they are not the only player.
  46. John Doucette from Manotick, Canada writes: Ah yes, another American takeover. Now the Department of Homeland Security will be able to legally listen to every Canadian conversation. Wow! PM Mini Steve will love it!
    God bless our Canadian colony.
  47. Frank Spelde from Canada writes: After all that is being sold out, somewhere in the United States someone is secretely designing a USA flag with potentially 62 stars.
    Of course, all of this is pending negotiations with our top government 'Canadian?' officials for some uhhhhh....Handsome retirement
  48. Buck Canuck from L9H 5E1, Canada writes: Unkle Wrinkly - Given that it is about money, this one stretches further that that. It's about how much do you need in order to sacrifice security of independence and vision. It's about pouring that coffee on your lap and scalding you. After a while, you don't go to Starbucks because the service is bad.
  49. Frank Spelde from Canada writes: Geoffrey L from Hamilton, Canada writes:

    'For those of you who say that the buyout of Canadian companies by foreign equity utilizing leveraged debt, at the expense of tax paying Canadians, you are treacherous traitors!'

    Not very professional Geoffry.....Try sticking to the point without insults!
  50. Mike L from Canada writes: Kohlberg-Kravis-Roberts! Well I guess they could get around the foreign ownership question by registering the ownwership in the name of Mrs Kravis. She is Marie-Josee Drouin, a Canadian economist (M.S., University of Ottawa) a director of the Hudson Institute, Officer of the Order of Canada.
  51. Timothy Nessus from Somewhere, Canada writes: Again, GM missing the point... as usual. Valid points:

    1 - It IS important that BCE remains Canadian for the SIMPLE FACT that we NEED factories here. The WHOLE global economy is going the 'service' way which is the toilet way. Otherwise, WHAT would stop the new 'owners' to simply shell-out and 'outsource' all BCE services??? As a consequence we will have LESS REAL work, LESS service, MORE taxes and HIGHER fees. Does this sound like fun?

    2 - Much that I would like to point a finger at such or such government (Canadian or US), the fact is that the LARGEST conspiracy, by far, is run by the 'Money Masters'. This is, LARGE, TRANSNACIONAL, ECONOMIC interests. A loose thread of roughly alined, ruthless, economic interests. If you do not belive me, just search for the 'key' word in the article: LEVERAGED. Sinmply put: NO $$$ NO DEAL. And WHERE do you think CHEAP $$$ is comming from???? WHO is the ONLY organization (in each country) capable of creating $$$ OUT OF THIN AIR??? You guessed! the BANKS!!! and WHO controls the so-called 'National Banks'??? You guessed again!!! the economic elite that controls the so-called 'governments'. Need I say more???
  52. Brian Sexsmith from Toronto, Canada writes: This is horrific news for Canada, but fits in well with the Conservative's idolatry of all things American. Thanks to Brian Mulroney and his 'take-it-for-free trade agreement' we are the most foreign owned country in the G8.
  53. Stop! Think! from Burlington, Canada writes: It looks like Flaherty stopped BCE and Telus from converting to income trusts because they want americans to buy us up...If BCE had converted we wouldn't have this issue now...Instead when Americans start firing people in order to 'streamline' the business it will be okay...I still can't understand how Flaherty thinks that foreign ownership is better than an income trust....What fools we have in power....Has anyone else noticed the massive amount of Canadian companies that have been snatched up by foreigners in the last 14 months???? Stand up for Canada = Canada for sale
  54. Cubby P. from GTA, Canada writes: Uncle Wrinkly: Agreed, completely. That said, if the quality of some of these comments are any indication, I'm not surprised there's such hysteria... Let's see one person asks if it will be a hostile takeover, then in the next breath is convinced that it will be. It says in the very first sentence that it is a 'FRIENDLY' takeover, hence KKR seeking to partner with major institutional holders like Teachers (also because they need the Canadian component, sure) and meeting with mgmnt. Another person thinks leverage means they will flip it. It simply means it will mostly be funded by debt - loans or bonds, possibly high-yield - with interest payments funded by cash flow (hence the appeal of BCE for this type of transaction as mentioned in the article). It's not some buzzword that they will turn around and offload it. This isn't an American company wholesale taking over a Canadian entity and it could be positive for Canada in many ways (Bell might finally be nudged out of it's slumber to actually compete and provide good service, more activist owners that will hold management to account, more value for existing shareholders etc.). In this age of globalization, I think a bigger threat to Canada is some of the insular thinking demonstrated here. It's downright scary actually. Guess i'm going to be slagged for this post...
  55. Carl Eric Codere from Montreal, Canada writes: BCE SHOULD NOT, I repeat NOT be sold to foreign interets... This is bad we are being taken over by foreign investors.... ;(
  56. Panty in a knot from Vancouver, Canada writes: Glad I switched my mobile to Telus last week. Bell's prices are not competative (even the government didn't give them business) and with zero switching costs now I see subscriber deterioration happening.

    Bell's CEO runs this company like it was a crown corporation from the 70's. No wonder KKK thinks they can do better.
  57. S G from Canada writes: Hard to believe, raise the cost of capital for public trusts, propose measures in a budget which limit canadian company's ability to invest in foreign jurisdictions, and then wonder why a large Canadian company can be taken out with such ease.

    Too bad no one saw this coming when the trust announcements were made.... Or perhaps no one took the time to listen because they believed the govt line....
  58. sam slick from White Rock BC, Canada writes: Enough talk.

    E-mail your member of Parliament and Mr. Harper!!!
  59. Alistair McLaughlin from Ottawa, Canada writes: You're all out to lunch. The entire Canadian telecommunications industry is being held back by foreign ownership restrictions. And you people want more such restrictions? Anyone with money to invest should be welcomed, provided they are not directly owned by some communist government (i.e. China). The foreign ownership restrictions as they currently exist work only to repress share prices, reduce investor income and limit access to investment capital. Most other countries don't bother with such restrictions in their telecommunications ownership. Just wait until we open up banking, what will you people say then?
  60. Robert C.K. from Canada writes: Good move, maybe this will get rid of the deadwood in the hulking company. I have to laugh at all those posters trying to dump this on the Minister of Finance goes to show you the ignorance of these people. If you do not like this then you buy BCE. Ha Ha.
  61. Stop! Think! from Burlington, Canada writes: Alistair - INvesting is one thing, a take-over is another, I would encourage investment, is is good, but a take-over will only mean mass firings as is always the case...Please choose your argument a little better and get more informed
  62. W G from Calgary, Canada writes: Funny, I don't see anyone here complaining about a possible Magna takeover of Chrysler. Its business, get over it and take your whining somewhere else.
  63. Bat Man from T.O., Canada writes: The 'Americanization' of this company can be no more than 46%. That's the law folks.

    I guess it's ok for our banks to buy American banks for instance. But then again that ATM fee charged for lazyness is bad.

    It's vary sad that so many Canadians want to live in welfare state.
  64. Alexander Dryden from Ottawa, Canada writes: I note, with considerable amusement, the 'shocked' comments of some usual suspects. Perhaps one should examine names and characters and histories of recent and current BCE/Globemedia management --> mostly I AM CANADIAN! Turdeaucrats and champagne-socialists, some of them people who did their damndest in the past to destroy Bell Canada (or, rather, plunder its [then-earned] revenues).

    This isn't 'Harper' selling out 'Canada.' This is incompetent Turdeaucrats grabbing big fat golden parachutes to save their own lives from the results of their gross incompetences.

    And (with regard to a previous comment), they have so little regard for 'Canada' and their 'widows and orphans' shareholders, yes, they probably would sell their 'souls' and the company to the taleban, if the taleban could come up with the cash.

    One wonders -- again with considerable amusement -- how the parliamentary lefties will handle this in QP. Perhaps it will depend on what preferential deal they can get on their personal shareholdings.
  65. Ranald Walton from Hamilton, Canada writes: I thought Mr Fijne (post # 1) would have been happy with this deal given the big premium being allegedly offered for BCE shares. The big premium should offset 'Halloween' losses. I guess the Prime Minister is responsible for all losses and gets no credit for any gains.
  66. b mac from Canada writes: Word must be out that Canada is for sale to the highest bidder.
  67. Alistair McLaughlin from Ottawa, Canada writes: Stop! Think! I am informed. So is Cubby P. from GTA (read his post above). Every time a Canadian company gets sold to Americans, the usual chorus of nationalist opinion shreiks out for the government to 'stop the sellout.' The government has no business telling private companies who they can and can't sell to. Too many people think 'publicly traded company' means that the general public, through the government, should have some say in how the company is run and who it gets to own it. Wrong. Publicly traded companies are still private property -- owned by many thousands of private interests, from individual investors to large institutional pension funds, who can sell their shares or hang on to them as they see fit. And you want the government to step in and tell them they can't take advantage of a good offer to buy their shares? No thanks.
  68. R H from Canada writes: W G from Calgary, Canada: If the deal goes down (and it's a big if), Magna will not be buying Chrysler. Magna is a stakeholder, and is in bed with an AMERICAN equity firm who are fronting the largest portion of the dollars involved.

    Please pay attention.

    Canada is primarily a resource based economy. Through the Income Trust lies and betrayals, our resources are being consumed by foreigners.

    Our telecom industry is fundamental to Canada, and to Canadians. Through the Income Trust Lies and Betrayals, this industry too is up for grab by foreigners.

    Harper is systematically staging the sell off of Canada's assets.

    To Whom, and WHY are the questions remaining.
  69. Globe Insider subscriber content
    Jimmy K from Toronto, Canada writes: ooo boy... my only question is after 5 years, will there be anything left on the Canadian equity markets for Canadian's to invest in? All our assets are being sold sold sold. Seems we are pricing ourselves much to low.
  70. Alistair McLaughlin from Ottawa, Canada writes: W G from Calgary, Canada writes: Funny, I don't see anyone here complaining about a possible Magna takeover of Chrysler. Its business, get over it and take your whining somewhere else.

    HA! That's an excellent point. I never thought of that. Imagine, a Canadian company taking over a former American-owned Big Three automaker. Who would have guessed it? Yes, foreigners by out Canadians; and Canadian firms by out foreign firms. It's a two way street. Such is life in an open economy like Canada's.
  71. mogens bay from Canada writes: Of course the Teachers Union, that just invested billions in a European company, will buy this firm. There is no way that the Canadian unions will let this company go to the Americans. Or was it Mr. Flaherty and Mr. Harper that bought this company?
  72. ann onnymous from Canada writes: just released by bce (internally):

    BCE

    MONTREAL, Quebec, March 29 2007 -- At the request of the TSX
    Market Regulation Services, BCE today issued a statement to confirm the fact
    that there are no ongoing discussions being held with any private equity
    investor with respect to any privatization of the Company or any similar
    transaction. BCE further stated the company has no current intention to pursue
    such discussions.
    As per the Company policy, BCE will not comment further on rumours and
    speculation.
    ---------------------------------
  73. R H from Canada writes: Alistair McLaughlin from Ottawa: As I just said, if the deal goes down (and it's a big if), Magna will not be buying Chrysler. Magna is a stakeholder, and is in bed with an AMERICAN equity firm who are fronting the largest portion of the dollars involved.

    Thank you for NOT paying attention. You need to read more than the headlines if you want to stay informed.
  74. Cubby P. from GTA, Canada writes: Mass firings happen in Canada and elsewhere with or without the KKRs of the world - to ignore that salient fact is disingenuous.

    Still, on a personal level I've no doubt it's very difficult for those employees at the receiving end of it. It's the way of big business and until someone finds an alternative, it will continue.

    Smart Canadians find ways to benefit from our proximity to the US instead of whinging and breaking out in hives every time there is some US involvement (mostly on the basis that they're evil' Americans). Seems so feeble...
  75. C.D. Howe from Montreal, Canada writes: I encourage everyone here to read 'Why Mexicans don't Drink Molson' by Andrea Mandel-Campell.

    There is no reason that Canadian companies should be bought up by foreign companies. The only reason this occurs is because Canadian companies are unwilling to buy foreign assets. So we just sit here in Canada while other national companies go multinational and grow 10x.
    The longer our companies sit behind market protections and fail to grow and expand globally, the smaller our companies will be compared to everyone else, and the easier they will be to buy.

    We can't stop globalization and foreign ownership. what we need to do is start buying foreign businesses and doing business abroad.
  76. Ian Gunn from Minneapolis, United States writes: Bat Man has it 100% correct. Nicely stated.

    All those foreign owned companies. How they don't pay taxes... Hugh? Who thinks Future Shop/Best Buy, Shell Canada, ATI and the other foreign owned companies do NOT pay taxes? Come on, if they sell something in Canada, they pay taxes in Canada.

    There are loopholes, and they should be closed. A few were closed in this budget and more best be closed in up coming budgets. For the MOST part, all foreign owned companies making a profit pay taxes.

    Do you need a company, any company to be owned by Canada to show/indicate you're a Canadian? I'm surrounded by 99.9% American, Indian and other nations (all good people) and each of them knows I'm Canadian and very proud of it. I'm been in the US for about 16 years. Not once have I considered switching my citizenship.

    It's a global economy. Please note this. There isn't a Canadian only economy. We just don't have the population of a US, India or China to have a Canadian only economy. Therefore to play in the big world, we have to accept companies owned not by Canadians will function in Canada. As long as our rules are fair AND they pay their fair share of the taxes, does it matter?

    If the service isn't there, then we'll go to some other provider. Do not create an environment where a company will do well when they offer poor service, even if Canadian.

    I've said this before, Canada must work on Productivity and education. Providing the best tools to our young (and those retooling) will make Canadians wanted all over the world. Removing ALL barriers to us being the most productive we can be would also help create more industry, services and such in Canada.

    The tax burden to the average Canadian is unacceptable. Period. This is the #1 PULL on productivity. Fix this and you'll have more Canadian companies strong enough to purchase companies outside of Canada.
  77. Paul Malouf from Montreal, Canada writes: The Ontario Security Commission should investigate the transactions around this annoucement. Inside Trading anyone???
  78. John A. Smith from Canada writes: Patriotism will not play a part in this takeover. Shareholders will decide what is in their best interest and simply vote accordingly. Many US companies have been taken over by Canadians - so the takeovers are not one-sided.
  79. Tony . from Waterloo, Canada writes: I'm generally pretty in favor of increased foreign investment and the reduction of Canadian telecom restrictions. In fact, I've spoken out in these forums about how I feel that these protectionist policies are one of the main reasons why our telecom sector has suffered so badly in the past 10 years relative to the rest of the world. In the late 90's Canada probably had one of, if not the best, telecommunications networks on the planet. Now the US and almost all of Europe has passed us by and in some areas (mobile phones especially) we're struggling to stay ahead of 3rd world countries!

    It's not being anti-Canadian at all. Quite the opposite, I'm very proudly Canadian and would rather strongly disagree with those who say there is no 'Canadian identity'. What I'm opposed to is protectionist policies that allow incompetent corporations to continue for the sole reason that our laws prevent anyone from competing effectively.

    However, that being said, I'm not sure that this particular merger is all that great of an idea. KKR is not likely to help anyone except themselves, their banks and their lawyers. Any other shareholders (possibly including Teachers) are likely to get shafted in the long run. This won't be a takeover to increase capital and allow expansion and infrastructure improvements, it's more likely to be 'slash 'n burn' style takeover.

    Of course, it's not like the current crop of management at BCE is doing all that much better.
  80. Frank Spelde from Canada writes: For all the people crying about foreign investments coming into Canada, here is an eye opener....Follow the link

    http://www40.statcan.ca/l01/cst01/econ08.htm

    It might surprise many people at every level just how much of their own money is making money abroad to serve their own purpose.

    Just adding some balance to the story.
  81. Panty in a knot from Vancouver, Canada writes: If Sabia and his gang actually created shareholder value, KKR wouldn't even be looking. In fact, Canadian orphins and widows have been the biggest loser with this dog and it will be good for them to finally shed it from their portfolio.

    The income trust thing is a non issue. Sure, it might have created some value on paper but this would still have been a value destroying dog and I don't think the cost of capital would make much diference to this mangement team.

    Canadian company or not, something needs to be done to fix this company and until now the management and board have done nothing.

    REgarding firings and outsourcing, yes this is this is the telecom indsutry in the 2007 folks. We don't need operators connecting wires to switches anymore. Quite frankly I would hope that our economy is robust enough that there are more value added jobs for our educated work force than call centres.

    I am sure there is lots of fat too be trimmed all in the name of productivity improvement (which improves a country's standard of living doesn't hurt it).

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