BCE Inc. (NYSE:BCE) share moved up $1.98, or 6.17%, to $34.05 today after the company announced that it began discussions with a group of Canadian pension funds in connection with its review of strategic alternatives. The announcement confirmed rumors that have already brought the stock up about 26% since March 29th. Many analysts warn that any buyout may not come at much of a premium to the current market price while the downside if a deal falls through could be quite steep.
The company confirmed that it was in talks with the pension consortium consisting of Canada Pension Plan Investment Board, Caisse De Depot et Placement Du Quebec and Public Sector Pension Investment Board; however, the company restated its dismissal that it was working with KKR or private equity funds on a possible deal. Overall, BCE may not be the best stock to purchase right now as the premium is too high; however, it could be a shorting target if a deal falls through or a buyout target if other bidders surface that would be willing to push up the price. Either way, this is a stock that is
worth watching!
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