Just days after the Canadian government announced it would move to deregulate the nation's telecommunications market, various pension funds and private equity funds were jockeying to launch a takeover of Bell Canada.
While facts were hard to pin down, rumors were flying. Most of the rumors centered around the Ontario Teachers' Pension Plan, which said it was "exploring its options" as the largest shareholder in BCE, as Bell Canada is called.
A report in Tuesday's New York Times stated that the pension fund was in talks to form a consortium to take over BCE in a deal that would "be the largest buyout in history." Kohlberg Kravis Roberts & Company, a U.S.-based private equity group, has been reported to be interested in the buyout for weeks, but the Times, citing regulations making it difficult for non-Canadian firms to take over Canadian firms, said KKR's involvement had been rebuffed.
Canada declined for years to deregulate its telecommunications industry and watched as the old AT&T Bell System went through breakup agonies over two decades in the U.S., only to gradually be pieced together again as Verizon Communications and a reconstituted AT&T, which are dominant in their respective regions.
Bell Canada and Telus, Canada's largest phone companies, have hailed the Conservative government's plan to deregulate their industry. However, cable TV companies and some consumer groups don't like the proposal. Cable companies have been offering some telephone service in Canada and, under deregulation, they're likely to face more aggressive competition from entrenched telephony firms.
Bell Canada and Telus have hailed the move to deregulate, spearheaded by Industry Minister Maxime Bernier. In a statement last week, Bell Canada's president and chief executive officer Michael Sabia said: "This government has seized the opportunity for a new model for telecom policy and that is great news."