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Text size [+][-]  Friday November 20 2009GLOBAL EDITION

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11 Dec 2008 15:40


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The private equity team that the agreed to acquire BCE said in a statement that they terminated the deal in accordance with its terms. The group, which included Providence Equity Partners, the Ontario Teachers’ Pension Plan, Madison Dearborn, and Merrill Lynch, said that a solvency opinion from KPMG allowed them to break the agreement without paying a termination fee.

The statement said that the June 30 2007 merger agreement required that a nationally recognised valuation firm must form a solvency opinion on the company before the deal closed. Both BCE and the private equity team selected KPMG to serve as the valuation, as reflected in the July 4 2008 amendment to the definitive agreement, the statement said.

 

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The Providence-led group pulled its $42bn bid for BCE, saying KPMG determined the deal would result in an insolvent company. The buyout firms’ investors benefited from some lucky breaks – and should question the firms’ judgment.

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More stories by:  Lauren Silva Laughlin




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