Bell Canada (BCE) shares plummet on shock news
Shares in Bell Canada fell sharply today as the company’s accountant KPMG announced the $50 billion privatization deal could be in trouble.
Bell Canada Enterprises who trades under BCE is one of the most prominent corporations in Canada. If the deal fails it will have a major effect on the Canadian markets and dent the reputation of the Ontario Teachers’ Pension Plan a large retirement fund as well as the lead purchaser of Bell Canada.
The deal will not be able to go ahead if Bell Canada is left solvent after the leverage buyout takes place according to the company’s accountant KPMG, after reviewing the buyout have said they are unsure if BCE will have enough cash to meet its financial obligation as part of the technical solvency definition.
The deal is set to close on December 11, investors are already doubtful that the deal is viable pushing BCE shares tumbling lower than the buyout price of $42.75 Canadian dollars ($34.60). By afternoon trading once the shocking news was out the share price in BCE fell 36 percent or 13.68 dollars at 24.50 on the Toronto Stock Exchange.
Source: iht
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