Ontario Teachers Pension Plan Strikes Buyout Deal with BCE

Press Release - July 1, 2007

Canada’s largest telecom provider, Bell Canada Enterprises Inc., has agreed to be acquired by the Ontario Teachers Pension Plan Board, in a cash and debt takeover deal worth $51.7 billion.

BCE announced yesterday that it had signed a deal with the pension plan’s investment arm, Teachers Private Capital, which will buy a 52% share of the company. U.S.-based Providence Equity Partners and Madison Dearborn Partners LLC, both of which agreed to back the Ontario Teachers’ bid, will own 32% and 9%, respectively, while minor Canadian investors will hold the remaining 7%. Canadian corporate ownership regulations prohibit foreign investors from owning more than 47% of BCE or its subsidiaries.

If the deal is approved at all levels, existing BCE shareholders will receive cash payments of $42.75 per share, a handsome 40% premium over the company’s average market capitalization in the first quarter.

Customers of Bell Canada will probably see little or no impact from the buyout, and the company will retain its existing management team, led by CEO, Michael Sabia. The Ontario Teachers Pension Plan is already the largest BCE shareholder, with a stake of 6.8%.