updated 08:50 pm EDT, Fri June 20, 2008
OTPP cleared to buy Bell
The Supreme Court of Canada on Friday ruled that the $52 billion purchase of Bell Canada is valid, allowing the Canadian telecommunications firm to be owned by the Ontario Teachers' Pension Plan. CBC reports that BCE stock jumped almost 10-percent as a result, rising $3.35 to close at $37.45 in New York. The deal overturns a previous court decision in the Quebec Court of Appeals, who ruled that the company must consider interests of bondholders.
The ruling also has the privilege of setting precedent, helping define legal rules that must be followed by directors to ensure proper steps have been taken in the event of a takeover.
Details on the ruling were not made readily available, other than that it received unanimous support from seven judges on overturning the previous verdict, and approving the current deal.
While the legal aspect is complete, bankers are still debating the move, with the four institutions reconsidering the deal in light of market instability.