BCE to take full control of Bell Canada
Montreal, - BCE plans to finish buying back the part of Bell Canada currently owned by SBC Communications by early December for $4.99 billion, the communications giant said Monday.
Based in Montreal, BCE said it has given notice to an affiliate of San Antonio, Texas-based SBC Communications to exercise its right to buy back the stake.
BCE said it will pay for the stake in Bell using the proceeds from a $2 billion stock offering, a $1.98 billion debt offering and part of the proceeds from the $3 billion sale of Bell Canada's directories business.
SBC will also get $250 million in BCE common stock to complete the deal.
BCE bought back four per cent of Bell Canada in June of this year for $1.33 billion.
In 1999, BCE sold a 20 per cent interest in Bell for $5.1 billion to Ameritech, which later merged with SBC Communications. Under terms of the deal, SBC had the right to force BCE to take its stake back at a premium price any time from July 1 until the end of the year.
BCE chief executive Michael Sabia said in late May of this year that his company was looking at buying back the stake in Bell Canada. In the wake of his comments, BCE went on its money-raising campaign, which culminated in today's announcement.
Shares of BCE fell 53 cents on Monday, closing at $28.02 on the TSX.
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