With the deadline for submitting a bid for BCE Inc. (Bell Canada) (NYSE/Toronto: BCE) now passed, it appears that there are three bidders in the running for Canada's largest phone company, with Telus Corp. (NYSE: TU; Toronto: T) surprisingly not one of them. (See Telus, Bell Canada in Takeover Talks.)

The three groups submitting bids are the Ontario Teacher's Pension Plan Board, the Canadian Pension Plan Board, and Cerebus Capital Management. Telus did not submit a bid, citing "inadequacies of BCE's bid process." A merger between Telus and BCE would have created a near monopoly, however, and likely presented regulatory obstacles.

The bids are all part of BCE's April 29 announcement that it was pursuing strategic alternatives and weighing whether it should remain a publicly held company. BCE expects to make a decision on these bids as part of this strategy review in the third quarter of 2007, according to a BCE spokesman.

Of the three bidders, the Ontario Teacher's Pension Plan Board is BCE's largest shareholder with a 6.3 percent stake. Like the other bidders, it is teaming up with a private equity firm, in this case U.S.-based Providence Equity Partners . The Ontario group was the first to make an offer to take BCE private, and as a large shareholder it stands to profit whether or not it wins the auction.

The Canadian Pension Plan Board submitted a last-second bid with the support of New York-based Kohlberg Kravis Roberts & Co. (KKR) . KKR had originally been reported as teaming up with the Ontario Pension Plan back in late March when rumors of a BCE takeover first began circulating. (See Bell Canada Denies Takeover Rumors.)

Cerebus is a U.S. firm that cannot actually be a majority owner of BCE due to Canadian regulations barring foreign companies from retaining a controlling stake in a company. To get around this, it is actually enlisting the help of some current BCE shareholders, which would result in it holding only a 46 percent stake.

BCE's stock has fallen more than 3 percent on the news that Telus would not be submitting a bid. Telus was believed to be able to make a higher bid than the other three due to cost savings it would have enjoyed from combining the two phone companies' operations. BCE is currently trading with a market cap just under $30 billion, which was the first reported bid back in March.

— Raymond McConville, Reporter, Light Reading