Maybe BCE / Ontario Teachers needs JP Morgan

2 responses

  1. joe blow says:


    Where does this $10 to the downside figure you keep referring to come from?

    As an average joe blow it looks to me like BCE is a cash printing press.

  2. Mark McQueen says:

    The downside estimate is based upon equity research analyst publications that guesstimtaed that BCE would trade down to $26-$28 if the Teachers LBO falls apart.

    As an average Joe, you can do your own analysis, however.

    The calc is something like:

    – where was BCE trading prior to the KKR going-private rumours?
    – subtract an estimate of whatever impact the federal government’s decision to open up some of the wireless spectrum could have on Bell’s mobile business (look at how Rogers B shares have traded since that decision as a proxy, recognizing that the market is down during that timeframe as well); hint: Rogers is down more than 10%
    – subtract an estimate for the impact of the selloff in the S&P 500 since the rumours came to the surface
    – add back an estimate of what Telus might do vis-a-vis a merger with BCE should the LBO fall away, and the impact that speculation could have on BCE shares

    Voila. You arrive at a number that’s not any lower than $25, but sure isn’t $30 should the LBO collapse in June.


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