Andrew Willis: What if the BCE takeover deal falls apart?

Money Talks is a collection of daily columns from The Business Network, which airs weekday mornings on CBC Radio One at 5:45 a.m. ET (6:15 a.m. ET in N.L.).

By Andrew Willis, a columnist with the Globe and Mail
(Listen to the original audio)

So after all the fuss and bother, BCE may remain an independent phone company. What does that mean?

Well, here's one scenario at what's coming for a classic widows and orphans holding. The damage to the stock price has already been done. If the Teachers bid really does fall apart, and it may take till November to actually die - then BCE will start life anew by doing one huge share buyback.

The company has amassed $2.5 billion in cash. Then it will raise the dividend, so cash that would have gone to paying down buyout debt instead goes to shareholders.

The company will focus on building wireless and taking advantage of the fact that the Bell brand name still means a lot to Canadians.

That's a boring way for this story to end. There is not a lot of high finance and business intrigue.

But for BCE shareholders, who have been whipsawed by deal-making over the past year, a little boredom would be a welcome development.

-- Andrew Willis

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