Stocks Of Canada's BCE Go Up As Buyout Talks Resume

Ontario, Canada (AHN) - Stock in Canada's BCE Inc. shot up by more than 8 percent after that country's Supreme Court issued a verdict Friday allowing the telecoms giant to proceed with a $51.3 billion leveraged buyout deal.

BCE gained as much as C$2.85, trading as high as C$37.45 before settling at C$34.60 (US$34.01) at the Toronto Stock Exchange on news that the largest leveraged buyout on record would finally proceed.

Last month, a Quebec Court of Appeals blocked the proposed buyout led by Ontario Teachers' Pension Plan, Providence Equity Partners and Madison Dearborn Partners. The court had said BCE didn't properly account for the interests of bondholders when it accepted a C$42.75 per share bid last year.

Institutional bondholders said to include Manulife Financial Corp., Canadian Imperial Bank of Commerce and Sun Life Financial are opposed to the buyout because additional debts would greatly devalue their holdings.

Leveraged buyouts are normally carried out by incurring new debt. The buyers are reportedly securing a C$34 billion loan from Toronto-Dominion Bank, Citigroup Inc., Deutsche Bank AG and Royal Bank of Scotland Group Plc for the BCE purchase.

So far, all indicators point towards the deal pushing through.