Bell Canada offices in downtown Montreal. (Ryan Remiorz/Canadian Press)

The takeover of BCE Inc. by a group led by the Ontario Teachers' Pension Plan hit another snag Wednesday after the Quebec Court of Appeal sided with the company's bondholders.

The Appeal Court overturned Justice Joel Silcoff's March decision to allow the takeover of the company in a deal worth $52 billion.

The bondholders had sought to block the deal, which they say treats them unfairly because it loads the telecom giant up with debt and makes their bonds a much riskier investment.

"BCE never attempted to justify the fairness and reasonableness of an arrangement that results in a significant adverse economic impact on the debentureholders while at that same time it accords a substantial premium to the shareholders," the Appeal Court ruled.

"Once there is, as in this case, a significant adverse effect on a class of securityholder (debentureholders), while other securityholders (shareholders) derive substantial benefits by an arrangement, the corporation has the burden of demonstrating that the arrangement is, nonetheless, fair and reasonable."

Shareholders overwhelmingly approved the takeover price of $42.75 per share last September.

But the debentureholders said the board of directors of Bell Canada never met to consider whether Bell's assumption of responsibility to repay the $34 billion in acquisition debt was in the best interests of the company.

BCE plans Supreme Court appeal

BCE said it will seek to appeal the case to the Supreme Court of Canada.

"The judgment overturning the Quebec Superior Court decision rewrites Canadian law relating to the duty of Canadian boards of directors to maximize value for shareholders in the context of a change of control transaction, as well as to the entitlements of bondholders in those circumstances," Martine Turcotte, chief legal officer of BCE and Bell Canada, said in a statement.

"Both the transaction and the issues of law involved are of public importance in Canada. We believe the Supreme Court of Canada should reverse this decision, and allow the transaction to proceed."

The company said the expected closing of the takeover will be contingent on the Supreme Court granting leave and the timing of the appeal.

Earlier this week, shares of BCE traded lower amid more uncertainty over the future of the deal after a report in the New York Times that said banks funding the deal were looking to amend the terms of the financing.

BCE shares closed down 28 cents at $37.12 on the Toronto Stock Exchange on Wednesday.