BCE buyout gets CRTC approval


TORONTO -- The $34.8 billion buyout of Canadian phone giant BCE Inc. and its broadcast assets by a consortium that includes three U.S. equity players moved a step closer to regulatory approval Tuesday as the country's broadcast watchdog said its foreign ownership concerns were largely put to rest.

"I believe you addressed all our concerns," Konrad von Finckenstein, chairman of the Canadian Radio-television and Telecommunications Commission, said after BCE's largest shareholder, the Ontario Teachers' Pension Plan, produced a letter from the Financial Services Commission of Ontario that OK'd the transaction.

In addition, the pension plan executives allayed earlier CRTC concerns over how much say the Canadian pension fund would have in the composition of the BCE board after it goes private.

A bid by the Ontario Teachers' Pension Plan and U.S.-based Providence Equity Partners, Madison Dearborn Partners and Merrill Lynch to take BCE private faced opposition from the CRTC over foreign-ownership concerns as BCE's assets include a stake in national TV network CTV and ownership of Bell ExpressVu, the direct-broadcast-satellite TV service.

The CRTC asked for a letter from the Financial Services Commission as the pension fund proposes holding a 51% stake in BCE, which breaches a loophole that bars a pension fund from more than a 30% voting stake in any company.

The regulator is expected to give its final okay to the BCE deal, which represents Canada's largest-ever leveraged buyout, by the end of March.

After that, permission from Industry Canada, an arm's-length government agency that will consider the privatization on competition grounds, is all that stands in the way of final regulatory approval.