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BCE Inc. has announced:

it has agreed to acquire 100% of CTV, the Canadian leader in specialtytelevision, digital media, conventional TV and radio broadcasting.
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Bell currently owns a 15% equity position in CTV and will acquire the remaining 85% for $1.3 billion inequity value from The Woodbridge Company Limited, the Toronto-based holding company of the Thomsonfamily; Ontario Teachers Pension Plan; and Torstar Corporation. Including the value of Bell’s present stake,the transaction has an equity value of $1.5 billion. Together with $1.7 billion in proportionate debt, the totaltransaction value is $3.2 billion. The purchase price represents a multiple of 10x proportionate EBITDA,comparable with similar recent media-industry transactions. In a separate transaction, Woodbridge willacquire ownership of the Globe and Mail, in which Bell will continue to retain a 15% equity position.
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Video is growing rapidly in popularity among Canadians, who are increasingly moving to mobile, online anddigital TV platforms for video content. Bell already offers Canada’s leading High Definition TV and onlineservices and the most advanced mobile TV products, and is in the process of launching its leading-edgeBell Fibe IPTV (internet protocol television) service in major urban centres. Bell TV now representsapproximately 40% of total residential service revenues, surpassing traditional home phone revenues.Bell is accelerating its wireline and wireless video capabilities with significant new investments in broadbandnetworks, including capital expenditures of almost $3 billion in 2010 alone. Bell is rolling out high-speedfibre to more houses, apartments, condominiums and businesses in Québec and Ontario to support newInternet and TV services and is enhancing its new world-leading HSPA+ wireless network, which alreadyserves 93% of the Canadian population.
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“The transaction purchase price represents an attractive standalone valuation for Canada’s leading mediaprovider even before upside opportunities from monetizing CTV’s programming across all of Bell’sbroadband wireless and wireline platforms. This acquisition is entirely consistent with Bell’s shareholdervalue objectives and dividend growth model,” said Siim Vanaselja, Chief Financial Officer for Bell Canadaand BCE. “It is immediately accretive to earnings and to free cash flow before potential synergies, with100% access to CTV cash flows. Bell’s acquisition of CTV will be funded with a new, fully committed bankfacility of $2 billion, $750 million in new BCE common shares that will be issued to Woodbridge, andsurplus cash on hand. The resulting pro forma net leverage of 2x EBITDA is consistent with Bell’s capitalstructure and financial policies. Based on our discussions with the rating agencies, we expect our creditratings to be confirmed.”
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Bell will hold a conference call for financial analysts to discuss its acquisition of CTV today at 9:30amEastern. Media are welcome to participate on a listen-only basis. To participate, please dial (416) 340-8018or toll-free 1-866-223-7781 shortly before the start of the call. A replay will be available for one week bydialing (416) 695-5800 or 1-800-408-3053 and entering pass code 6461260 followed by the number sign.There will also be a live audio webcast of the call available at www.bce.ca/en/news/eventscalendar/webcasts/2010/20100910. The MP3 file will be available for download on this page later in the day.

DBRS has announced that it:

has today confirmed the long- and short-term ratings of BCE Inc. (BCE) and its wholly-owned operating subsidiary, Bell Canada, at A (low) and R-1 (low), following Bell Canada’s announcement today that it will acquire 85% of CTVglobemedia Inc. (CTV) and its television, digital media and radio operations (excluding The Globe and Mail) for $1.3 billion in equity value. The trend on all ratings is Stable.
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From a financial perspective, while the acquisition of CTV will slightly weaken Bell Canada’s credit metrics, DBRS believes that the impact will be manageable. DBRS anticipates that while Bell Canada’s gross debt-to-EBITDA is expected to increase from roughly 1.52x (at June 30, 2010), this ratio is not expected to exceed 2.0x with the acquisition of CTV. DBRS does note that the financing of the acquisition of CTV, along with the refinancing of the majority of its existing debt, is expected to be carried out at the Bell Canada level. As such, CTV will support the credit profile of Bell Canada once the transaction closes.

BCE has a plethora of FixedFloaters and Ratchets outstanding. Tracked by HIMIPref™ are: BCE.PR.A, BCE.PR.B, BCE.PR.C, BCE.PR.D, BCE.PR.F, BCE.PR.G, BCE.PR.H, BCE.PR.I, BCE.PR.R, BCE.PR.S, BCE.PR.T, BCE.PR.Y and BCE.PR.Z. Not tracked by HIMIPref™, for no particularly good reason, is BCE.PR.E.

All the tracked issues are relegated to the Scraps index on credit concerns.

This entry was posted on Friday, September 10th, 2010 at 4:18 pm and is filed under Issue Comments. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.