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Yellow Media Inc. president and CEO Marc Tellier: Yellow Media bondholders have no real leverage until next year, when the company must refinance its debt. The biggest risk is that in the meantime, morale at Yellow Media gets so bad that the company’s main asset, its sales force, starts leaving.
Yellow Media Inc. president and CEO Marc Tellier: Yellow Media bondholders have no real leverage until next year, when the company must refinance its debt. The biggest risk is that in the meantime, morale at Yellow Media gets so bad that the company’s main asset, its sales force, starts leaving.
(Graham Hughes/The Canadian Press/Graham Hughes/The Canadian Press)

Cerberus deal sets the bar for Yellow Media bondholders

For investors wondering what’s next at two fallen Canadian angels, Yellow Media Inc. and Research In Motion Ltd., two deals in the United States provide some hope of hidden value.

Private-equity firm Cerberus Capital Management is buying half of AT&T Corp.’s directories business in a deal that values the whole enterprise at almost $2-billion (U.S.), suggesting Yellow Media is worth more than bond markets are pricing in. And AOL Inc., once the dominant online company, is selling its patent portfolio at a huge premium to the market’s expectations, creating the possibility that RIM’s trove of intellectual property is similarly undervalued.