Canada's biggest buyout collapses

[dipsydoodle]

Source: BBC News

The biggest takeover in Canada's history has collapsed on the day it was supposed to have been completed.

A group led by Ontario Teachers Pension Plan Board had agreed to buy BCE, owner of Bell Canada, for Canadian $34.8bn ($27.8bn; £18.6bn) in June 2007.

But the accountants KPMG said last night the company would fail solvency tests because it had too much debt.

It is good news for the banks that had agreed to provide the $35bn (£23bn) of debt to finance the deal.

Read more: http://news.bbc.co.uk/1/hi/business/7777004.stm

[Double T]

1. Everything and everyone will eventually collapse financially.

This ugly and horrendous economic and financial monster knows no bottom.

[Robbien]

2. "KPMG would not give a favourable solvency opinion once BCE was burdened with buyout debt"

Exactly the same situation as the Chicago Trib. The Trib was a profitable (about 5-10%) company until it was burdened with Zell's billions of dollars of debt. The accountants were asleep at their calculators when not ringing the alarm on the Trib buyout.

[dipsydoodle]

3. All of the big auditing partnerships

are careful since the demise of Anderson's following the Enron debacle.

[Robbien]

5. True, but not really since Enron.

Auditing partnerships were complicit in this whole financial system meltdown we are currently having.

I believe the caution auditors are now showing is because the fear finally got knocked into them when Congress starting going after the rating agencies. Somehow auditing firms have escaped being blamed for their part of that scheme so are now acting with discretion.

[Sen. Walter Sobchak]

4. The Ontario Teachers Mafia was insane to take on Bell

"Ontario Teachers Mafia" is not a reference to it as a union, the OTPP is one of the toughest and brutal pension plan investors out there. Their real estate division Cadillac Fairview is simply a force of nature.

Every segment of the Bell business is under serious strain or attack, both their cellular and satellite TV businesses require billions in investment just to hold the line, CTV is more or less worthless and can't afford its HDTV conversion nationwide and regulatory speaking just tearing BCE to pieces and selling it off is impossible since nobody in Canada would take on Bell Mobility, Bell ExpressVu or CTV and foreign ownership rules cut off anybody (Verizon, Echostar etc.) who might want to.