BELUS? Not in the Near Future

It doesn't look like BCE Inc. and Telus Corp. (TU) will be joining forces anytime soon now that Canada's Competition Bureau is looking for a new commissioner, says Scotia Capital analyst John Henderson.

"A new head of the Competition Bureau this month makes it less likely in our view that BCE or TELUS will consider proposing a merger in the near term," he said in a report.

In mid December, Sheridan Scott, former commissioner of the Competition Bureau, said she was leaving the regulator to join the Ottawa office of Bennett Jones LLP in January. Melanie Aitken has been named Acting Commissioner of Competition.

The analyst also noted the potential upheaval in Canada's government as a barrier to a merger of the telecom rivals, and removed his previous 15% probability of BELUS coming to pass in the next 12 months.

He lowered his 1-year price target on BCE from C$30 to C$29 and left his "sector perform" rating unchanged.

In a seperate note, Mr. Henderson upgraded his rating on Manitoba Telecom Services Inc. (MOBAF.PK), from "sector underperform" to "sector perform," saying the stock "underperformed its peers, declining 13% (including its dividend), since our downgrade on October 8, 2008." He left his one-year C$42.50 price target unchanged.