(January 26 – 18:00 ET) – BCE Inc. has decided to spin-off its stake in market giant Nortel Networks Corp. BCE currently owns about 39% of Nortel.
It proposes to dump all but 2% of its ownership position in a tax-free share exchange deal. A new Nortel will be created and hold all the shares. Each Nortel shareholder will receive shares in the new company on a 1:1 basis. BCE shareholders will receive 0.78 shares in the new firm for each BCE share they hold. The ratio for BCE shareholders is subject to adjustment, says the company.
“It will unleash us as a totally independent global company focused squarely on the growth engines of the Internet,” says Nortel President and Chief Executive Officer, John Roth. “It will put us on an equal footing with our peers in that our ownership and stock will be widely held. With more shares available to the market more people will be able to participate as we move to unlock the tremendous potential Nortel Networks has as a leader in the Internet revolution. It is a ‘win-win’ for our present and future shareholders.”
The deal is expected to close by the end of the second quarter, although it is still subject to regulatory, shareholder and court approval, and receipt of appropriate tax rulings. RBC Dominion Securities Inc. and Credit Suisse First Boston Corp. structured the deal.
-IE Staff