BCE sues Teachers' group, partners for $1.2B breakup fee
BCE Inc. sued the Ontario Teachers' Pension Plan and its partners Wednesday for a $1.2-billion breakup fee over the group's failure to complete its purchase of the Bell Canada parent company.
The suit filed in Quebec Superior Court named Teachers', Providence Equity Partners International and Madison Dearborn Capital Partners as defendants.
Merrill Lynch Global Private Equity, a partner in the takeover bid, was not included in the lawsuit.
"The failure of the deal to close on Dec. 11, 2008, was directly related to both the burden of the loan financing arranged by the defendants and a deterioration in the global market conditions, each of which was a risk borne by the defendants under the contractual agreement for the transaction," BCE said in its filing with the court.
The Teachers'-led group walked away from its deal to buy BCE last week after the company failed to meet a key auditors test, a solvency opinion.
Under the circumstances that the deal collapsed, neither party owes a termination fee to the other, the teachers' group said.
However, BCE accused the investor group of breaking off the deal on Dec. 10, a day before the key deadline for the deal to close and when the solvency opinion was due.
"In any event, even if the purchaser's termination was valid, its termination of the definitive agreement pursuant to the outside date termination right nonetheless triggered its obligation to pay the break-up fee to BCE," the company said.
Canada's largest telecommunications company said it satisfied all closing conditions for the $42.75-per-share cash deal, other than the solvency opinion.