The holding company that owns BellCanada said it has entered into talks with three major institutional investors and a large private-equity firm about a potential buyout that could take Canada’s largest phone carrier private.
If Montreal-based BCE Inc. agrees to a deal, it would represent the biggest corporate acquisition in Canadian history.
In early U.S. trading, shares of BCE were up more than 4 percent at $33.57 on the New York Stock Exchange. The stock closed Monday at $32.07, up $1.40.
As part of a “strategic review” to enhance shareholders’ value, BCE said it’s discussing a deal with three large Canadian pension funds – Canada Pension Plan Investment Board, the Caisse de depot et placement du Quebec and the Public Sector Pension Investment Board.
In addition, Kohlberg Kravis Roberts of New York, one of the biggest private-equity firms in the world, would join the group of Canadian pension funds as a minority partner. BCE said it plans to ensure that Bell Canada remains Canadian to comply with existing foreign-ownership restrictions.
Last month, BCE denied press reports it was holding talks with private-equity investors, though BCE’s statement suggested that some discussions had taken place. BCE also said at the time that it had “no current intention to pursue such discussions.”
Yet the company was pressured by other major investors – such as the Ontario Teachers Pension Plan, BCE’s largest single shareholder – to consider alternatives to boost the value of its stock. The Ontario teachers fund owns about 5 percent of BCE.