Tuesday, October 6th3.7°C

BCE buying stake in Bell Aliant it doesn't already own and will keep the brand

MONTREAL - Canada's biggest telecom company, BCE Inc., is buying the stake in Bell Aliant that it doesn't already own for $3.95 billion in cash and stock, but will keep the brand's presence in Atlantic Canada.

BCE Inc. (TSX:BCE), which already owns 44 per cent of Bell Aliant, announced the plan to take the company private with an offer worth $31 per share.

"The Bell Aliant brand will stay where it is," Bell Aliant chief executive Karen Sheriff said Wednesday on a conference call to provide details about the deal.

"The Bell Aliant headquarters will stay where it is," Sheriff said. "I think what this really does is take that local expertise and commitment that we've always had and put the full backing behind us of BCE to make us very, very strong as we move forward to help us keep being the `preferred guy' in each of our local markets."

No job cuts were announced as a result of the deal.

Under the offer, Bell Aliant shareholders may choose between $31 in cash, 0.6371 of a BCE common share or a combination of cash and stock. BCE said the total amount paid will be 25 per cent in cash and 75 per cent in shares.

Bell Aliant (TSX:BA) provides television, Internet and phone services.

BCE said the company will continue to serve customers in New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island from its Halifax headquarters. Bell Aliant also has regional telecom operations in rural Ontario and Quebec.

BCE chief executive George Cope said bringing Bell Aliant fully into BCE simplifies the its structure and eliminates the costs of running two publicly traded companies.

BCE also announced on Wednesday the acquisition of two call centres in New Brunswick, which will serve Bell Canada customers and add an additional 700 jobs to Bell Canada.

The move came as BCE continued its expansion of its high-speed LTE wireless network to more than 100 additional communities in Atlantic Canada that will be completed by the end of 2015.

BCE said it plans a capital investment of $2.1 billion across Atlantic Canada over the next five years to continue the roll out broadband wireline and wireless for consumers and business users.

Canaccord Genuity analyst Dvai Ghose wasn't surprised by BCE's announcement.

"The deal has been speculated for a long time, does not require regulatory approvals, as BCE already controls Bell Aliant, and is at the high end of the fairness approval range, we assume a quick close," Ghose wrote in a research note.

Ghose also said the deal should be financially advantageous for BCE and also should help it raise its dividend in 2015.

"But deal will also have a negative impact on BCE's asset mix and growth and highlights BCE's weakness," he said.

"Consequently as with the CTV and Astral acquisitions, we envisage near-to-medium term accretion but longer term declines. The deal therefore suggests to us that BCE has to continue to acquire to grow dividends, unlike its nearest peer Telus which has targeted at least 10 per cent annual DPS (dividend) growth to 2016."

The Canadian Press

Read more Business News

Recent Trending

Today's Market
S&P TSX13552.20+212.46
S&P CDNX529.91+4.35
S&P 5001987.05+35.69
CDN Dollar0.76440.00
Natural Gas2.469+0.019

Okanagan Companies
Pacific Safety0.215+0.000
QHR Technologies Inc1.22+0.03
Metalex Ventures0.06+0.00
Russel Metals22.51+1.03
Copper Mountain Mining0.50+0.08
Colorado Resources0.07-0.01
ReliaBrand Inc0.004-0.000
Sunrise Resources Ltd0.02+0.00
Mission Ready Services0.095+0.005
Decisive Dividend Corp3.49+0.00
Diamcor Mining0.90+0.02



2448367101 3850 Brown Rd
2 Percent Realty Okanagan Ltd baths
more details
Click here to feature your property
Please wait... loading

Perfect (reno'd) home

Photo: Thinkstock.comHow many times have you found a home in the perfect location, but it needs too much work as per the home inspection? There is a great program available through most lenders that w...

Living beyond 100

Photo: ContributedThere was a time most careers involved an apprenticeship of one sort another. Some official, others involving years of servitude, and others time simply spent watching and emulating ...

5 Claim misconceptions

Photo: Thinkstock.comIf you have been hurt in an accident or as a result of medical negligence you will likely look to your friends and family for some advice on how to deal with the situation. These ...




Member of BC Press Council