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I can't say I viewed BCE Inc. (NYSE:BCE) a takeover target when recommending its shares last August. Then again, any stock we buy could wind up being "in play" if we're correct in thinking it is undervalued.

So while the news that BCE has had talks with buyout firm Kohlberg Kravis Roberts was a surprise -- and a welcome one at that -- we shouldn't say we're shocked.

From the linked Bloomberg report:

Kohlberg executives have met with BCE Chief Executive Officer Michael Sabia within the past two weeks, to discuss terms of a friendly takeover bid, the Globe and Mail said, citing people it didn't name. The New York-based buyout firm has also approached Ontario Teachers' Pension Plan, BCE's biggest shareholder, to be a partner in the deal, the newspaper said. Kohlberg and Teachers teamed up on bids for Shoppers Drug Mart Corp. and Yellow Pages Group LP.

BCE issued a statement that talks are not ongoing with KKR and has no plans to pursue them. Some analysts speculate that BCE management hasn't been thinking in terms of selling the company -- believing their strategy of selling off non-core assets, focusing on strategic businesses and boosting shareholder payouts would eventually lift the stock price.

I agree and that's why I'm a shareholder.

Moreover, KKR's interest is yet more evidence that loads of money is sloshing around out there looking for deals. And that BCE -- one of those boring, old, legacy phone companies -- is a valuable asset after all.

Source: Is KKR Bidding for BCE?