BCE warned Wednesday it might not be able to meet the conditions ...
BCE warned Wednesday it might not be able to meet the conditions of its proposed agreement to be taken private. Auditing firm KPMG notified the company and its buyers that based on an analysis, market conditions and the amount…
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of debt being used to fund the deal, BCE won’t be able to deliver a solvency opinion -- an express condition to closing the merger, BCE said. The company is disappointed with KPMG’s preliminary view, which is based on assumptions and methods that it’s reviewing, CEO George Cope said. BCE disagrees that the addition of the debt would result in the company not meeting the solvency definition, Chief Financial Officer Siim Vanaselja said. BCE will continue to work with KPMG and the buyers to satisfy all closing conditions, it said. But the transaction is unlikely to proceed if KPMG is unable to deliver a favorable opinion on Dec. 11, it said. The buyers have been working closely with BCE to take the actions required by the definitive agreement and will continue to fulfill its obligations under its terms, said the buyers group, led by Providence Equity Partners and Ontario Teachers’ Pension Plan. BCE shares tumbled Wednesday. An underfunded pension at BCE may have entered into KPMG’s decision, said UBS analyst Jeffrey Fan. If the deal doesn’t close, BCE is expected to reinstate its dividend and buy back stock, said Credit Suisse analyst Randal Rudniski.