“The Supreme Court of Canada will be hearing arguably one of the most important corporate law cases in decades.” – Aaron Dhir, who teaches corporate law at Osgood Hall Law School in Toronto on the eve of this week's Supreme Court of Canada hearing.
“This is one of the most important commercial law cases to come before this court in a generation. This case goes to the very root of corporate law in Canada.” – BCE Inc. in filings with the Supreme Court of Canada.
“M&A lawyers are anxious to hear the Supreme Court's views. Our highest court may finally say ‘yea' or ‘nay' to what has been a guiding principle in Canadian corporate acquisitions for over two decades. Canadian counsels regularly advise clients that if a company is ‘in play,' management has a duty to maximize shareholder value.” – Christopher C. Nicholls, a professor in the faculty of law at the University of Western Ontario, in a Globe and Mail article published June 9, 2008.
“BCE never attempted to justify the fairness and reasonableness of an arrangement that results in a significant adverse economic impact on the debenture holders while at the same time it accords a substantial premium to the shareholders. Once there is, as in this case, a significant adverse effect on a class of security holder (debenture holders), while other security holders (shareholders) derive substantial benefits by an arrangement, the corporation has the burden of demonstrating that the arrangement is, nonetheless, fair and reasonable.” – J.J. Michael Robert, chief justice of the Quebec Court of Appeal, on May 21, 2008, in overturning an earlier decision by the Quebec Superior Court and refusing to approve the leveraged buyout of BCE Inc.
“It's hard to imagine how it could be resurrected. The deal appears dead.” – Hanif Mamdani, head of corporate bonds at Phillips, Hager & North Investment Management Ltd., one of the bondholders that sued, on May 21 after the court of appeal decision.
“We were surprised by the [appeal court's] decision. It has far-reaching ramifications for the capital markets here in Canada. We will be a very interested observer as to what may happen next if it is heard by the Supreme Court and how they rule. There will be many questions raised in the wake of this ruling if in fact it stands, and it is a precedent case for future transactions.” – David Denison, president and chief executive officer of the Canada Pension Plan Investment Board, in an interview May 22, 2008.
“They [the bond holders] should have foreseen the risk … If they were not prepared to manage that risk, they should have taken appropriate steps to protect themselves. They chose not to and must accept the consequences of their decisions.” – Mr. Justice Joel Silcoff of the Quebec Superior Court in a March 7, 2008, ruling against the bondholders, adding that sophisticated bondholders such as the Canadian Imperial Bank of Commerce's money management arm and Manulife financial should have known that a debt-heavy takeover was a possibility when they invested in BCE debt.
“It's no great surprise that banks who did a deal and priced it on the credit markets of June, 2007, would like different terms in June '08.” – analyst Dvai Ghose of Genuity Capital Markets in Toronto after BCE shares plummeted on March 19, 2008, on reports that banks that had agreed to finance the deal were threatenign to walk away unless the deal was renegotiated.
“During the quarter, we made good progress on the completion of the privatization transaction and delivered solid financial results, consistent with our plan for the year.” – Michael Sabia, outgoing chief executive officer of BCE Inc., in announcing the company's first-quarter results May 7, 2008.
“The [risk] bar has been raised a little higher because of the time frame now.” – Greg Eckle, senior vice-president at Morgan Meighen & Associates, on March 19, 2008, after BCE announced it would take longer than originally planned to close the buyout because of the bondholders' appeal.
“The intrigue around [BCE] never seems to end. I look forward to the day when [BCE] is out of the public's eye.” – Jim Leech, chief executive officer of Ontario Teacher's Pension Plan, in an interview Jan. 23, 2008, commenting on the constant speculation about the deal's financing.
“BCE is under a lot of stress with the odds of the deal failing getting larger by the minute.” – Francis Campeau, a broker at MF Global Canada in Montreal, on Jan 21, 2008, after BCE's stock closed at $34.42, 19 per cent below the proposed takeover price of $42.75 a share.
“I am pleased and excited by the opportunity to lead BCE as it enters a dynamic new era.” – George Cope, in a statement Oct. 17, 2007, after he was chosen to succeed Michael Sabia as CEO of BCE Inc. after the proposed takeover by the Ontario Teacher's Pension Plan closes.
“We are fortunate to have George [Cope], a proven and exceptional telecommunications executive, ready to lead BCE forward.” – Jim Leech, then-president and incoming CEO, at Ontario Teacher's Pension Plan, on Oct. 17, 2007.
"I just can't get the ball over the goal line." – Darren Entwistle, chief executive officer on Telus Corp., in an August 3, 2007 conference call with analysts in explaining why he had abandoned his dream of acquiring arch-rival BCE Inc.
“There were a lot of noisy grievances from bidders who were trying to tilt the auction in their direction or who genuinely felt it was being tilted away from them … There was a lot of noise and some of it was nasty and personal. I had to keep everyone focused on the law so what we were doing was best for shareholders." – corporate lawyer Ed Waitzer recalled in a July, 2007, interview, referring to his role as an adviser to a special committee of BCE directors during the earlier auction to sell BCE.
"Being a Bell pensioner, I thought about all the years I worked for the company. It's a bit heart-wrenching to that degree. The dividend is also kind of nice." – Gerald White, a retired BCE marketer and shareholder, in June, 2007, about the proposed takeover.
"It's a great win for shareholders, and a great endorsement of what's been going on and the future potential that the business has…I think what matters here is not the letters BCE on a ticker at the TSX. I think what matters here is how the company performs in the role that it plays in serving customers and, through serving customers, serving the interests of Canada in general." – BCE CEO Michael Sabia in a July, 2007, interview after the deal was made to sell to Ontario Teachers Pension Plan.
"We must find long-term investments that provide good cash flow into the future … I think a telecom company meets that criteria. This is the largest one in the country, No. 1 in many of its markets, so those are the attributes that we like." – Jim Leech, who headed negotiations for Ontario Teachers Pension Plan, in an interview on Canada Day weekend, 2007.
"Congratulations. You've won a great company." – BCE chairman Richard Currie in advising Ontario Teacher's Pension Plan Board on Canada Day weekend, 2007, that it had won the auction for BCE.
