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Private BCE 'Bad For Canada

Date: Wednesday, June 27, 2007
Author: Albourne Village

The Star reports: Canadians may not like the idea of a marriage between two top phone companies, but Telus Corp. CEO Darren Entwistle says BCE Inc.'s future will be bleak if the phone giant falls into the hands of private-equity players.

On the eve of today's deadline for bids, Entwistle said Telus's proposal to merge the Vancouver-based firm with Bell Canada's parent is the only way to protect a key industry that is the backbone of Canada's "knowledge-based economy."

Meanwhile, there were reports last night that the Caisse de dépôt et placement du Québec and Gerry Schwartz's leveraged buyout firm Onex Corp. had pulled out of another consortium that was bidding for BCE. Such a development would put into question the ability of that group – which still includes the Canada Pension Plan Investment Board and U.S. buyout specialists Kohlberg Kravis Roberts & Co. – to compete seriously for Canada's largest telecommunications company.

While all of the private-equity consortiums bidding on BCE claim to be Canadian-led, Entwistle argued that it's a near-certainty chunks of BCE's business will eventually find their way into the hands of U.S. firms as assets are spun-off or sold by new owners looking for a return on their investment.