Buyer Beware: BCE Not a Done Deal

Beware of the “purchase agreement” that propelled BCE Inc shares to $39.50 in recent days, says Harry Levant in a report on his Income Trust Research website. What was signed was a Definitive Agreement, not an Agreement for Purchase and Sale. An actual sale has not occurred and no money has changed hands.

The agreement sets out terms and conditions for the transaction to proceed while leaving a number of key issues subject to renegotiation. And it issues a warning to investors not to rely upon the document for investment purposes: As the first statement on the document, at the top of the first page, states, the agreement is:

“not for purposes of disclosure to investors or any other purpose. The terms of this agreement may be varied or amended. Accordingly, investors and potential investors are cautioned that it would be inappropriate to rely on this document in making an investment decision.......”

What particularly seems odd is further postponement of the deadline for completion of the transaction to December. Doesn’t this suggest there are still some rather knotty issues to resolve -- that it’s not a “done deal”?