The sale of BCE Inc., parent of telecommunications company Bell Canada, hit a snag Wednesday when an appeals court sided with BCE bondholders who wanted to stop the $35.1-billion takeover by a group led by one of Canada’s largest pension funds.
The Quebec Court of Appeal reversed a lower court decision to allow BCE’s takeover by the Ontario Teachers Pension Plan in what would be the largest leveraged buyout in Canadian history.
The bondholders had tried to block the deal, saying it would load Canada’s largest telecom company with debt and make their bonds a much riskier investment.
Shareholders overwhelmingly approved the buyout group’s offer of $43.12 a share in September.
But the bondholders said Bell Canada’s directors never met to consider whether Bell’s assumption of responsibility to repay $34.3 billion in acquisition debt was in the best interests of the company.
Despite the ruling, the pension fund remained committed to the deal Wednesday.
“We’re reviewing the ruling and evaluating our options,” spokeswoman Deborah Allan said.