BCE Termination Fee

BCE (BCE) finally reached the drop dead date when the deal was supposed to close but did not. They are now fighting to collect the CDN$1.2 Billion fee from Ontario Teacher, Providence Equity Partners, and Madison Dearborn Equity Partners. The BCE year end is Dec 31 which is just a few weeks away. So the question becomes do they include it as a receivable on the balance sheet as well as record it as extraordinary profit. Will the auditor allow the entry on the year end statements. Will executives get bonuses based on profits that may not be real? Where does Teachers stand in all of this? Officially the pension plan was making the offer through a private equity vehicle. But any way you want to cut it, does the pension plan have any pockets with about $1.2 billion dollars that it does not need. Most pension plans do not.

Teachers and associates issued this press release

“BCE Acquisition Inc. ("Purchaser") issued the following statement in response to today's demand by BCE Inc. (TSX, NYSE: BCE) that the Purchaser pay BCE a C$1.2 billion termination fee due to the failure of the privatization transaction to close. "It is most unfortunate that BCE is threatening litigation over the failure of a mutual closing condition that the company insisted be included in the original acquisition agreement. It is very clear that neither party has a right to a termination fee in these circumstances. Should BCE commence such baseless litigation, we are confident that it would not succeed."