14 DAY TRIAL // A couple of years ago, the Ontario Teachers’ Pension Plan was said to be putting in efforts in an attempt to take over BCE. Yesterday morning, valuation firm KPMG announced the supposed deal as officially dead since the Canadian company could not meet the conditions needed for such a takeover.
Such a development was not that unexpected since KPMG's opinion had already been known for some time, according to which the company in question could not pass a solvency test, which represented one of the conditions. This statement was issued on November 26, but since then, there have been some private, intense efforts to solve this deadlock.
As said efforts were being made and everyone was paying attention to the shares that were constantly losing ground, BCA officials tried to salvage their company’s reputation with several scare declarations. These statements, which implied that somehow BCE would solve its problems, and would thus pass the solvency test in question turned out to be a false advertising move.
As a result, the only declarations that can be regarded as true are those made by KPMG on Thursday, such as, "Because KPMG has concluded that a required test for the solvency opinion was not met, this mutual condition to completion of the acquisition could not be, and was not, satisfied. [...] Accordingly, the purchaser terminated the agreement in accordance with its terms."
Since this deal was not possible, BCE is now restructuring in many areas, eliminating the departments that are not absolutely necessary and, consequently, firing plenty of employees and reducing the number of managers.
It appears that these measures have been in progress for some time now, and some analysts are saying that these changes, besides the previously mentioned restructuring, also include the development of the company for new marketing possibilities. Also, the aim seems to be now the development of a new wireless network capable of 3G technologies, while the company is also looking to be restored to its former glory in the market share value department, as well as in its evaluation from users.
Carmi Levy, a telecom analyst at AR Communications spoke his mind regarding the changes BCE is instating, saying that "They have succeeded in driving the positive changes that they had been asking for all along."
In a recent interview, Tory Crandall of MacDougall, MacDougall & MacTier also enforced the previous declaration, stating that, "Not only will that be helpful to the share price, that will also be helpful for EPS growth at least for 2009."