By ReutersInformationWeek
Bondholders asked the Supreme Court on Friday to reject the
telecom giant's request to be allowed to appeal the decision.
The debt holders won a surprise Quebec appeals court
decision last week that BCE's privatization was unfair to them
as it would lower the value of their debentures.
"There is no doubt that the completion of the plan in its
present form will materially prejudice the debenture holders," a
group of bondholders said in their submission to the Supreme
Court, meeting a court-imposed deadline of the close of
business on Friday.
They said their losses collectively exceed 20%.
The bondholders also argued that it was unfair to them to
shorten the normal timetable for any hearing, and said that in
any case the Quebec decision did not raise any issues of
national importance that merited the high court's attention.
The Supreme Court, conscious of the June 30 deadline for
court approval of what would be the world's largest leveraged
buyout, has earmarked June 17 for an oral hearing if it does
decide to hear the appeal.
It has also given a clear signal that it would decide in
the next several days on whether to hear the appeal, because it
has suggested June 6 as a deadline for BCE's written arguments.
If it decides not to hear the appeal, the Quebec court ruling
stands.
The Ontario Teachers' Pension Plan is leading the attempt
to privatize BCE, which is Canada's largest and the parent of
Bell Canada.
Partners in the bid are U.S.-based private equity firms
Providence Equity Partners, Madison Dearborn Partners and
Merrill Lynch Global Private Equity.
BCE says the Quebec court decision jeopardizes billions of
dollars of value for BCE and hundreds of thousands of
shareholders.
In the wake of the Quebec decision the BCE share price has
fallen to C$35.05, well below the C$42.75 being offered in the
proposed buyout.
But the bondholders in their submission on Friday contested
the "alleged losses" of the shareholders: "The current trading
price of the BCE shares remains well above the trading price in
the period before there was any public speculation about a
possible leveraged buyout for BCE."
The creditors argue that the deal would relegate the status
of their bonds to not much more than those of junk bonds, and
the Quebec court sided with them.
($1=$0.99 Canadian)
(Reporting by Randall Palmer; editing by Rob Wilson)
Copyright 2008 Reuters. See original article on InformationWeek
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