Mark McQueen isn't embracing the connection between Clear Channel Communications Inc. and BCE Inc. On Monday, Clear Channel announced that it was close to reaching an agreement on litigation issues surrounding the earlier collapse of its takeover by private equity buyout firms – putting that takeover back on the table, at a reduced price that could be 10 per cent lower.
Investors concluded that what's good for Clear Channel has got to be good for BCE, since it too faces uncertainty over its impending takeover by private equity players. BCE shares rose on Monday and are up again on Tuesday. They traded at $38.60, up 1.3 per cent, at midday.
But Mr. McQueen feels it's premature to abandon any concerns that the BCE deal could still fall through or that a new price could emerge. As he noted on the Wellington Financial blog, if the BCE deal comes in 10 per cent below the original offer of $42.75 (just like Clear Channel), the new price would be $38.50 – or close to the current price of the stock, leaving no upside.
“The chances of the deal closing appear to be higher than in recent days. But at $42.75?” Mr. McQueen said on his blog. “Not that a $4.65 bump wouldn't be nice if the deal closes at the original $42.75 price, but the odds of that are…?”
