The Ontario Teachers’ Pension Plan(OTTP)may be in talks with the U.S. private equity firm Kohlberg Kravis Roberts(KKR)to buy out BCE, according to recent reports.
KKR is interested in a leveraged buyout of the Canadian telecommunications company but it cannot have a controlling stake because of regulatory hurdles. These include the foreign ownership rules that prevent non-Canadians from owning more than 46% of the voting stake of a telecom firm.
The Ontario Teachers’ Pension Plan(OTTP)fund may be in talks with the U.S. private equity firm Kohlberg Kravis Roberts(KKR)to buyout BCE Inc., according to recent reports.
KKR is interested in a leveraged buyout of the Canadian telecommunications company but it cannot have a controlling stake because of regulatory hurdles. These include the foreign ownership rules that prevent non-Canadians from owning more than 46% of the voting stake of a telecom firm.
That’s where OTTP comes in. KKR has allegedly tried to recruit Canadian partners for the deal and has been in talks with Teachers’. OTTP has assets of about $100-billion and owns 5.3% of BCE, making it the company’s biggest shareholder.
If successful, the purchase of BCE would rank as the biggest acquisition in Canadian corporate history and one of the world’s biggest leveraged buyouts
Teachers’ has not made any official comments about the reports. But BCE issued a statement that said: “there are no ongoing discussions being held with any private equity investor with rewpect to any privatization of the company or any similar transaction.” The telecom firm also stated that it has no current intention to pursue such discussions.
This wouldn’t be the first time OTTP and KKR partner for a deal. In 2002, the two teamed up to buy BCE’s Yellow Pages business for $3-billion and two years before that, KKR and Teachers’ paid $2.6-billion for Shoppers Drug Mart, which has since been taken public.
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