Bell Canada Deal Gets Breathing Room
Additionally, the three-judge panel granted Bell Canada’s request for an expedited hearing. The deal has a closing deadline of June 30, giving the telco little time to have its appeal heard under normal court procedures. The Supreme Court will hear the appeal on June 17, when the rest of the telecom world will be focused on NXTcomm. (See Court Approves BCE Appeal.)
The court’s decision is merely a tactical victory for Bell Canada. The court gave no reason for its ruling, so its decision provides no indicator of what direction it could potentially go in when it hears the appeal.
The Quebec Court of Appeals had ruled last month that the deal to take Bell Canada Private was unfair to certain bond holders. (See Oh Canada: BCE Buyout Falls Apart.) If the Supreme Court decided not to hear the appeal, the deal would have been officially dead.
The Bell Canada deal represents the largest leveraged buyout ever. The financing for it was never on solid ground to begin with. as the agreement was made just as credit markets were beginning to tighten. Some of the U.S.-based investors like Citigroup have recently asked to have the terms of their loans reworked.
The judges hearing the appeal on June 17 could render a decision immediately or reserve it for a later date.
— Raymond McConville, Reporter, Light Reading