Royal Bank of Scotland: Is Nationalization Good or Bad for BCE-LBO Deal?

If the British government is essentially taking over The Royal Bank of Scotland (RBS) via a 15 billion Pound equity infusion this morning, is this 1) good for the Ontario Teachers-led buyout of BCE (BCE), or 2) is it the death knell? According to the Wall Street Journal, the new ownership structure will also include a new CEO. RBS is one of the four banks leading the buyout lending effort, along with Toronto-Dominion Bank (TD), Citigroup (C) and Deutsche Bank (DB).

On the one hand, a restructured and stronger balance sheet makes it easier, in theory, for RBS to complete their part of the $52 billion LBO. On the other, does Teachers want to sue — in essence — the British Government if RBS walks away from their commitment to fund their portion of the buyout?

How many times have the folks leading the charge of the world’s largest would-be LBO woken-up in the morning and thought “now what”? Too many to count, I’m sure, and December isn’t even here yet.

Disclosure: I own BCE.