BCE’s downside volume part three
Love the power of the internet. BCE has issued a press release regarding “certain rumours”: i.e. our stock is in freefall. We saw the need for an update on Wednesday (see “Definition of troubling: BCE’s downside volume“, December 12-07) and – if you missed it – suggested a release at noon today; Bay Street’s favourite DTM specialist at the Globe and Mail made a similar point at 12:58 p.m. Here’s the news from the horse’s mouth:
BCE Inc. (TSX, NYSE: BCE) is today issuing a statement in response to certain rumours in the market regarding the status of its definitive agreement to be acquired by an investor group led by Teachers’ Private Capital, the private investment arm of the Ontario Teachers’ Pension Plan, Providence Equity Partners Inc. and Madison Dearborn Partners, LLC (the Investor Group).
While it is BCE’s policy not to comment on market rumours or speculation, in the interest of its shareholders, the company is today confirming that neither BCE nor its Board of Directors is involved in any discussions regarding any renegotiation of any of the terms of the definitive agreement entered into on June 29, 2007.
Under the terms of the definitive agreement, the Investor Group has agreed to acquire all of BCE’s outstanding common shares for $42.75 per share in cash and all of BCE’s outstanding preferred shares at prices set out in the definitive agreement.
The stock was down 6% over the past five trading sessions on 10s of millions of shares. Those aren’t rumours, they are real trades. No actual rumours were published in any DTM outlet until an hour prior to the press release hitting the wire. The multi-day share price swoon only fueled the nervousness, which drove the stock down further. Naturally.
Good for the BCE Board to agree with the mood of the Blogosphere and get the message out (see post “BCE’s downside volume part two“, December 14-07), even if the two events aren’t related. Stock jumped $1.50 on the press release. Phew.
But should we be any less nervous about the deal falling apart (being repriced) than before the press release? Perhaps so, perhaps so.
(disclosure – I own BCE)