BCE: A Bidding War Target for the World's Second Largest Buyout

Portfolio holding BCE (BCE) may be the target of a bidding war. One bidder looks to be a group led the Ontario Teachers Pension Plan, with the competing group being Kohlberg Kravis Roberts & Co. and a group of Canadian pension-fund managers.

Frederic Tomesco and Chris Fournier report for Bloomberg:

"BCE's officially in play now and I think it's definitely a good thing,'' said Jonathan Popper, a portfolio manager at MFC Global Investments, which oversees the equivalent of $80 billion, including BCE shares.

More:

The bids may reach the "low to mid-40s,'' Popper said. A buyout of BCE would be the world's second largest, after the $31 billion acquisition of Texas power producer TXU Corp. (TXU) by KKR and TPG Inc., excluding debt. It would also put BCE in private hands for the first time in more than a century.

Further down the piece:

"If you own something, it's always delightful to have two others that want to buy it,'' said Bill Procter, senior vice president and fund manager at Toronto-based MacKenzie Financial Corp., BCE's second-largest shareholder. He said he expects a price of at least C$40 a share.

And then this:

Claude Boulos, who helps manage about $26.6 billion at Natcan Investment Management in Montreal, also expects a price of more than C$40. The firm owns BCE shares. "The ball's rolling,'' Boulos said. "We're in the good position to be able to sit back and see where it goes.''

That we are. The risk right now, of course, is that the bids somehow disappear and BCE's recent stock price gains get reversed. Yet that doesn't appear on the horizon.

This story remains fluid. Let's stay tuned and see what happens.

BCE 1-yr chart